WeWork Faces the Devaluation Wrath a Week ahead of its IPO
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Ahead of its IPO, co-working giant, WeWork, seems to be facing tough times. According to media reports, The We Company, parent company of WeWork is bringing down its valuation to US$20 billion, less than half of the US$47 billion valuation at which was the case when it raised funds in January this year.
Things have not been moving in the best direction for WeWork. The entire real estate sector has been hit and WeWork seems to be no exception. This is just the speculation that has been surrounding the company ahead of its IPO, no statement has been issued by the company as yet.
There were also reports of WeWork’s co-founder and CEO, Adam Neumann, flying down to Tokyo to meet the company’s investor, Softbank, to seek help so as to clear the mess the company has been in. The property tech startup decided to go public at a crucial juncture. Incidentally, SoftBank-backed companies like Uber and Lyft have not had a very successful run at the public listing board. Both giants have been trading more than 30per cent below their IPO prices. Neumann meeting Masayoshi Son fuelled fresh rumours of a possible capital coming from the Japanese conglomerate that would help the co-working giant push the IPO to next year. According to a report by the Wall Street Journal, Neumann has encashed $700 million from a mix of stock and debt. All these movement-meeting Softbank, encashing the amount could be directed towards monetizing the losses that are being reported.
Adam Neumann founded WeWork in 2010 with his co-founder Miguel Mckelvey and his partner Rebekah Paltrow Neumann. The company is Neumann’s third attempt and it rose to great heights despite the real estate slump in the economy.