WeWork reduces valuation of IPOs to less than $ 25 billion

The valuation targets of the controversial real estate company WeWork have been drastically reduced and the real estate company will not be open to the public next week, sources told David Faber of CNBC.

Even at $ 25 billion, the demand is not there, according to sources. WeWork last collected $ 47 billion in private market funds.

WeWork's previous valuation comes after SoftBank, the company's largest funder, invested $ 5 billion in primary growth capital and additional $ 1 billion in secondary financing.

WeWork leases workspaces to start-ups and other businesses and was founded in 2010 by CEO Adam Neumann. According to his website, WeWork is "determined to raise the collective consciousness of the world by developing happiness and releasing the superpowers of all humans".

The company turned a blind eye on Wall Street as it prepares for an initial public offering, both for its high valuation goals and for the recent controversy involving Neumann. In July, We bought Neumann $ 5.9 million in shares for the brand. It was previously owned by We Holdings LLC, an investment vehicle managed by CEO and co-founder Miguel McKelvey.

Neumann then returned the payment of the stock.

Some prominent real estate investors, indifferent to the company's optimism and concerned about corporate governance less than stellar society, are less certain.

Sam Zell, who made nearly $ 6 billion in the commercial real estate industry and joined CNBC on Wednesday, criticized WeWork for offering nothing more than what already exists on the market.

"I've had the privilege of investing in this type of company once before.In fact, this type of company started in 1956," office sublet announced Wednesday, Zell said.

"All the companies in this sector have gone bankrupt," he said, noting last month's publication by WeWork's IPO of a net loss of more than $ 900 million for the six first months of 2019, for a business turnover of 1.54 billion dollars.

WeWork, which has changed its name to We, has 528 sites and plans to open 169 new sites. Half of its members are based outside the United States. The WSJ has for the first time reported a decline in valuation.