WeWork delays the IPO while it is suspected that it is not a technology company worth $ 47 billion

No matter what WeWork is – a technology company or simply a cult real estate company that offers kombucha at the tap and desperately wants to be considered a tech company – it may not be public soon.

WeWork's parent company, We Company, "is expected to postpone its initial public offering", as investors worried about the company's true value and the pending issues on its corporate governance, reported Monday the Wall Street Journal. While the space coworking firm expected to participate in the IPO this month, the Journal announced that its investor roadshow would now begin "in mid-October at the earliest", with some investors SoftBank inviting WeWork to wait until 2020.

WeWork strives to justify its $ 47 billion, which was largely based on its claim to be a technology company, while long-term leases with short-term tenants are mostly contracted. not be able to pay in case of a recession and would have used the Wi-Fi password "P @ ssw0rd" in most of its premises. Over the last few years, WeWork has lost more than $ 3 billion and, according to the Journal, executives and underwriters have "resigned" to a valuation of "something close to $ 15 billion to $ 20 billion. less. "

According to Reuters, the decision to delay the IPO also indicates that investors are not satisfied with recent efforts to appease detractors of CEO and co-founder Adam Neumann, who faces scrutiny for imprecise details such as than charging $ 5.9 million for his own business. the brand "We" and cashing more than $ 700 million in shares. The changes supposed to prevent Neumann from returning on September 13 have apparently not allowed to achieve the desired effect:

Our company stated that the changes were made "in response to market feedback". Neumann's higher voting shares will increase from 20 to 10 votes per share, but will retain majority control of the company.

Neumann will also remit to the company the profits it would receive in real estate transactions in which it has entered into contracts with We Company. It will also limit its ability to sell shares in the second and third years after the IPO to a maximum of 10% of its shares.

(It should be noted that Neumann once suggested that his company should receive the highest valuation possible to help solve the refugee crisis.)

According to rumors, according to some rumors, the company We Company last week considered a valuation of 10 to 12 billion dollars IPOs, less than the $ 12.8 billion of equity that it has raised since 2010 and derisory enough to kick-start venture capital. industry. Our company is bound by a commitment on a $ 6 billion line of credit that it has secured from banks in August, forcing it to go public and raise at least $ 3 billion worth of money. 39, here the end of the year. Reuters wrote that even taking into account SoftBank's offer to buy stock worth between $ 750 million and $ 1 billion, We Company had concluded that it would only bring in $ 2 billion of dollars. This could eventually leave the company with a need for alternative financing, which is a bit like a list of ships frantically crafting Craigslist ads for lifeboats.

"We are looking forward to our next IPO, which is expected to be completed by the end of the year," a company spokesman told Reuters in a statement. "We would like to thank all our employees, members and partners for their continued commitment."

Looks like everything is fine there.