The IPO debut of WeWork was expected to be among the biggest debuts made this year. However, it looks like the company is headed to be among the worst IPO debacles seen in recent history.
Ever since WeWork filed the paperwork needed for its IPO, the company has been attempting to defend itself against outside criticisms and investor concerns by agreeing to add additional board members, having the CEO pay back millions of dollars for a certain trademark that his company had bought off of him, and overhauled its corporate governance system completely.
However, that doesn’t seem to assuage the concerns around the company. Every day, there’s a report, which only brings the company’s IPO valuation further down. Initially valued at over $47B in private markets, the WSJ reported last week that its valuation could be lowered to $20B. CNBC, on Friday, reported that this valuation was now expected to be below $15B. To add insult to injury, Reuters didn’t hold back as well, claiming the valuation would be around $10B.
The company’s willingness to go ahead with its IPO, despite facing such steep cuts from its previous valuation shows that the company is being pressurized to raise funds now, as it’s currently bleeding money. TWC reportedly wishes to obtain a credit line valued at $6B, which would only be possible if at least $3B is raised in its IPO before 2019 comes to an end.
A WeWork spokesperson declined to give a comment on the issue, citing rules that prevented him from making a statement prior to an IPO.
The company is currently facing intense criticism and scrutiny from all corners of the industry. It has become the poster child for excesses committed by tech unicorns, an issue that has come under focus several times in the past. Tech unicorns refer to private companies that are valued at over $1B or more.
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