[ad_1]
WeWork, the giant of the shared office space, was able to gain support from some of the world's leading investors, but received a much colder welcome when it tried to sell its shares on Wall Street.
Showing a deep skepticism about its business model and its governance, the company has now hinted that it may not try to become public for a few months and that one person involved in the offer had stated that she was likely to be completely abandoned.
This week, it was expected that the company will begin a presentation tour of its stock offering – where it introduced potential investors – said two people. That would have put it on track to start trading on the Nasdaq stock market by the end of next week.
But at a meeting on Monday, leaders and advisers decided to put the projects aside for the moment after finding the dropper of potential investors, people said, asking not to be identified during internal discussions.
In a statement issued late Monday, WeWork's parent company, We, said it expected the offer would be finalized by the end of the year.
But a delay – whether for weeks or months – may not allay the concerns of investors who had questioned the valuation of the company. WeWork was valued at $ 47 billion by the private sector in January, when Japan's SoftBank made a significant investment. But the prospect of becoming public has drawn attention to a company that is deeply unprofitable and likely to remain so for years to come.
WeWork has tried to save its bid in several ways. On Friday, the company announced that it would reduce the power of its co-founder and general manager, Adam Neumann, in the face of criticisms made against the company's corporate government.
WeWork is the latest in the so-called unicorns – companies funded by venture capital companies valued at $ 1 billion or more – that are weakening. The shares of Uber and Lyft, two other unicorns, fell sharply after their IPO this year.
WeWork, Manhattan's largest private tenant, rents out large office spaces and converts them into elegant workspaces. Although the company has grown rapidly, it remains deeply unprofitable. In the first half of this year, the group recorded a $ 1.37 billion operating loss and spent $ 1.5 billion in cash.
Analysts and investors also said WeWork had not received details on profits and occupancy, which would give them a better idea of the performance of its properties.
If the initial offer is significantly delayed, WeWork will have to find other ways to raise funds.
Without an injection of new money, We may have to slow down its expansion, which consumes hundreds of millions of dollars in cash. In the first half of this year, the company spent $ 1.5 billion in cash to manage its operations and grow its business. Its balance sheet amounted to nearly $ 2.5 billion at the end of June.
She had planned to raise $ 6 billion on bank financing related to the sale of shares – but this money would only be available if the company raised at least $ 3 billion from the IPO.
This funding has not been renegotiated yet, said one of the people informed about it, although it is possible that WeWork will eventually conclude a new agreement with the banks.
[ad_2]
Source link