Softbank Having Second Thoughts About the WeWork IPO

September 12, 2019 | Venture Capital
https://dailyalts.com/wp-content/uploads/2019/09/startup-593341_1920-wework-softbank.jpg

SoftBank, a significant investor in WeWork, wants the shared workspace company to postpone its IPO

The WeWork IPO could cost Softbank investors a lot of money if trends continue.

And what a comedown we have witnessed. WeWork had a valuation of $47 billion earlier this year when SoftBank invested $2 billion. But investors are unlikely to give the company a valuation of more than $15 billion to $20 billion, sources said.

With advisers said to be testing investor appetite in that range, SoftBank is disappointed. It has invested over $10 billion in WeWork.

SoftBank’s $9.3 billion investment in Uber is underwater after the ride-hailing company’s stock fell 30% from its IPO price.

In case WeWork accepts SoftBank’s advice and puts off its IPO, it would not be eligible to draw loans worth $6 billion from a group of banks.

Investors wary of WeWork IPO

Investors have been upset by WeWork’s governance, complicated corporate structure, and a controversial payment to co-founder and CEO Adam Neumann.

Neumann has since returned the amount of $5.9 million that WeWork paid to him to use the trademarked word “we.”

Investors are also concerned that the company has a mismatch of tenures. It leases office space for a long period of as much as 15 years, but rents to tenants on shorter terms.

Moreover, WeWork’s business model remains untested by a recession or economic slowdown. It has already lost over $4 billion since 2016, though revenues have grown at a scorching pace.

Free Industry News

Subscribe to our free newsletter for updates and news about alternatives investments.

  • This field is for validation purposes and should be left unchanged.


Alt Insights

January 29, 2020

Venture Capital: The Kobe in “Bryant Stibel & Co”

Venture Capital: The Kobe in “Bryant Stibel & Co”
Shape

Latest Alternative Investment News

https://dailyalts.com/wp-content/uploads/2020/04/57e8d14b4d50ac14f1dc8460c62c3e761c3dd6f85254794c7c2b78d4944a_640.jpg
Fintech: M&A In the Fintech Space Will Heat Up
April 3, 2020     FinTech, News

One of the clear winners, if there is such a thing of the current economic situation, will be fintech companies. And we can expect to see a wave of fintech…

https://dailyalts.com/wp-content/uploads/2020/04/57e6d64a435bac14f1dc8460c62c3e761c3dd6f85254794c7c2b79d0904b_640.jpg
REITS: Industrial Properties Look Promising On These Trends
April 3, 2020     News, Real Estate

Like most Real Estate Investment Trusts, the prices of industrial REITs have declined sharply in the coronavirus driven selloff in the equity markets. While there may be real concerns for…

Private Equity: Is Dave and Busters a PIPE Dream?
April 3, 2020     News, Private Equity

Dave and Busters (NASDAQ:PLAY) have been hard hit by the economic downturn. The restaurant and arcade company closed its stores across the United States. It furloughed at least 15,000 hourly…

https://dailyalts.com/wp-content/uploads/2020/04/57e8dc40435aa914f1dc8460c62c3e761c3dd6f85254794c7c2b7ad7914e_640.jpg
Real Estate: Blackstone Group Pulls Out of Oakland Deal for Upton Station Building
April 3, 2020     News, Real Estate

Blackstone Group (NYSE: BX) is pulling out of a deal to buy an office property in Oakland, California, for $400 million. Blackstone had planned to use funds from its non-traded…

Scroll to Top