WeWork’s IPO valuation may fall to $10 billion, only a fifth of its original valuation.

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[Summary] If the company’s listed value is less than $25 billion, it may force Softbank to write down its investment. Earlier media reports said that the $47 billion valuation came from Softbank’s vision fund, which invested $10 billion to acquire a 29% stake.
Tencent Technologies News, Sept. 14, according to foreign media reports, despite reports that the largest investors want to change their listing plans, WeWork, the office space giant, is pushing ahead with its first public offering (IPO) in 2019 at full speed, even if that means cutting its valuation by as much as four-fifths.
The We Company, WeWork’s parent company, has submitted a revised prospectus to the Securities and Exchange Commission (SEC), disclosing that the company has been allowed to list on Nasdaq and announcing several corporate governance reforms aimed at easing investor influence over its founder, Adam Neumann. Excessive worry.
Hours later, media reports suggested that the company might seek a valuation of between $10 billion and $12 billion in its IPO, which could be only about a fifth of its current private valuation of $47 billion.
SoftBank, WeWork’s main investor in this round of financing, has reportedly asked Neumann to consider postponing or canceling its IPO. The We Company plans to appoint a chief independent director by the end of this year to halve Norman’s high-priority stock influence, prevent other members of his family from joining the board, and give the board the power to dismiss the CEO.
In addition, Neumann has agreed to repay WeWork all the profits he earned from the real estate deal. Previously, he was listed as the owner of many real estate, while his company was a tenant. He had previously agreed to refund the company’s $5.9 million payment for the “We” trademark, and added a woman to the board because the original prospectus showed that its board members were all men.
In the latest amendment, The We Company said it intends to add a board member in the next year to increase its gender or ethnic diversity. It remains to be seen when the company will actually go public. It said earlier that the target was September, but that was before the company made a series of changes to its listing plan and valuation objectives.
If the company’s listed value is less than $25 billion, it may force Softbank to write down its investment. Earlier media reports said that the $47 billion valuation came from Softbank’s vision fund, which invested $10 billion to acquire a 29% stake. Lower valuations will also weaken the influence of soft silver.
After WeWork submitted its initial prospectus last month, one of the key issues facing many investors is how influential Neumann is for the company and how he uses that influence to make money. Using his stock as collateral, he applied for $500 million in credit lines from several banks and sold millions of shares in the year before the prospectus was issued.
Noyman’s family occupies different positions in WeWork, and his wife Rebekah is the company’s chief brand and influence officer. According to the new submission, she will no longer be one of the three members of the succession Committee as previously planned in the prospectus. If Norman dies, loses his capacity or is dismissed, the entire board of directors will decide on his successor.
Although Noyman’s High-voting stock rights dropped from 20 votes to 10 votes per share, he still controls more than 50% of the company’s voting rights. In a previous revision of the prospectus, Neumann agreed not to sell shares for a year after the listing. In the latest document, he also agreed to sell no more than 10% of the shares annually in the second and third years after the IPO.
All these measures may give investors confidence in WeWork’s leadership, but despite growing revenue, WeWork lost nearly $2 billion for the second consecutive year. The company disclosed that it has no profitability in the near future, nor specific plans to achieve profitability.
The We Company’s next move is a roadshow for potential investors, which has been reported to start as early as September 16. However, it remains to be seen whether changes in governance are enough to convince investors that the losing company is worth risking. (Tencent Technology Revision/Jinlu)