WeWork Considers Slashing Its IPO Valuation to Levels Below $20 Billion
2019 might not have been a great year for the stock markets so far, but it has certainly been the year of mega initial public offerings. Earlier on this year, ride-hailing giant, Uber went public in the biggest IPO in the history of Wall Street. On the other hand, some other companies like Lyft and Beyond Meat made splashes in the market as well. Another IPO that has been in the news due to its sheer size and scope is that of co-working space startup “WeWork.” It is a revolutionary company that counts some of the biggest companies in the world as its clients, and hence, it has been a highly anticipated IPO. However, much of the company’s business has come into sharp focus ahead of its roadshow and many analysts have been quite critical of its numbers.
At the start of 2019, the company was worth around $47 billion and it was believed that at its IPO, WeWork was going to seek a much higher valuation. However, that is apparently not going to happen if recent reports are to be believed. In a report by a leading financial daily, WeWork is now considering a valuation of less than $20 billion from its IPO. The company’s roadshow is going to start on Monday, but the company is currently locked in talks with key investors to figure out the changes before it begins. As a matter of fact, some investors have even gone to urge WeWork to actually postpone the IPO altogether due to fears of low demand for the company’s shares among investors.
It is a strange turn of affairs for the startup, which had been regarded as the next big thing by some of the biggest investment banks and underwriters on Wall Street even recently. For instance, Goldman Sachs had projected that the company could be worth as much as $65 billion in the not too distant future. Moreover, an IPO of such size would have also resulted in a massive payday for some of the underwriters and brokerages. The IPO is hugely vital for WeWork, and its founder is keen to ensure that the listing does, in fact, take place. According to a report, the company needs to raise at least $3 billion from the IPO in order to get access to the credit facility of $6 billion.