From hot to not: WeWork’s IPO plans - Sept 13th 2019
The office-space-subleasing company WeWork is reportedly urged by SoftBank, the company’s biggest outside shareholder, to shelve its IPO plans. The nine-year old American company, which runs shared offices in 111 cities worldwide, received lukewarm response from would-be investors on its IPO plans, and is pressured to slash its valuation by more than half to around $20 bn. Executives are putting their heads together on what to do next. By now, SoftBank and its subsidiary Vision Fund have injected over $10 bn into WeWork. There is no guarantee that more capital may come WeWork’s way. Analysts from Wall Street have pointed fingers at WeWork’s controversial payments made to co-founder Adam Neumann. The complicated corporate structure is another factor that spooked potential investors, as shareholders have little say in the company’s mismanagement. The twist comes closely after the weaker-than-expected IPOs of loss-making behemoths Uber and Lyft. These developments have been seen as signals of the market’s changing attitude towards the cash-burning unicorn startups.
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