WeWork Slashes IPO Valuation By Tens Of Billions

This is non investment advice. The author has no position in whatsoever of the stocks mentioned. WCCF TECH INC has a disclosure and ethics policy.

WeWork is a shared-infinite real estate company that subdivides leases properties for businesses or individuals who need workspaces quickly and hands. I recently wrote near them a few weeks ago on the topic of their somewhat misleading financial numbers released in their South-1 IPO prospectus.

The visitor, which rebranded itself every bit the We Co., seemed to overly complicate the cost basis for many of its leased properties which in turn makes it really hard to evaluate the return on investment that information technology receives over time. Investors need to be able to evaluate how much profit that We Co. tin earn, and when the price basis is and so hard to understand their ability to value the start-up becomes dirty.

WeWork looking to exist a shaky investment

wework sign

Perhaps that'southward why The Wall Street Journal reported earlier today that WeWork is delaying its IPO to an undisclosed date. We Co. was originally targeting an IPO in the side by side few weeks so this is rather startling, to say the least.

All the same much more apropos than that, is sources have been reporting to multiple outlets that the valuation itself the company is seeking has absolutely plummeted from a peak of around $47 billion, to now "somewhere in the 20's, mayhap on the lower end of that", which means we could exist looking at a $20B valuation if the visitor decides to motion ahead with its IPO.

The WeWork platform was valued at $47 billion just earlier this year when Japanese mega investment banking concern SoftBank plowed $ii billion dollars of new capital into We Co. at a valuation of $47B! It's exceedingly rare to see a visitor slash its valuation by more half just weeks ahead of an IPO, and because SoftBank has nearly $vii billion greenbacks invested into We Co. we take to believe SoftBank is reconsidering its investment strategy in WeWork.

The change signals an air of desperation surrounding WeWork as information technology is surely attempting to clarify its value proposition to investors after a dirty starting time to things with its South-ane. "Panic mode" might not be a horrible clarification of the situation at We Co. as the company must exist able to raise capital to continue its business model since many of its investments (lease properties) are said to have multiple years to become truly profitable.