The We Company considers delaying IPO and slashing valuation to $20B: report

Execs reportedly discussed another cash infusion by its largest investor, SoftBank, during recent meeting in Tokyo

September 05, 2019 10:56 AM
The We Company CEO Adam Neumann and Softbank CEO Masayoshi Son (Credit: Getty Images)

The We Company CEO Adam Neumann and Softbank CEO Masayoshi Son (Credit: Getty Images)

The We Company is planning to halve its valuation and discussed delaying its initial public offering until next year, as a tornado of criticism has been hurled at the company in recent weeks.

At a meeting in Tokyo last week, co-founder and chief executive Adam Neumann met with the company’s largest investor, SoftBank, to discuss the immediate future of the office-space startup, according to the Wall Street Journal.

Among the options laid out for the WeWork parent company, executives reportedly discussed another cash infusion by SoftBank, with an aim to delay the IPO until 2020. Another option involved a purchase by the Japanese telecom conglomerate of $3 billion to $4 billion raised in the IPO.

The executives also reportedly discussed chopping its IPO valuation to the low end of $20 billion, more than half of its most recent $47 billion valuation, earmarked during its latest capital raise.

The We Company earlier this month polarized stakeholders following the release of an IPO filing to the U.S. Securities & Exchange Commission, which included information about huge personal loans issued by the company to Neumann and other executives, even as it continued to hemorrhage capital.

Some of the most prominent criticisms focused on the company’s new all-male board, and a disclosure that Neumann was paid $5.9 million to sell the rights of the word “We” to the company. This week, it announced that a woman had been appointed to the board, and that Neumann would return the payment for the word “We.”

The latest report adds fuel to an increasingly fluid situation for the We Company. Earlier this week, Bloomberg reported that the company could start an IPO roadshow as early as next week.  [WSJ] — David Jeans

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