WeWork Parent Weighs Further Valuation Cut

By Maureen Farrell Sept. 8, 2019 5:05 pm ET WeWork’s parent is eyeing a valuation for its initial public offering that could fall below $20 billion as some existing investors push the workspace company to shelve the planned offering, people familiar with the matter said.

A valuation below $20 billion would be an even steeper drop from the $47 billion mark where We last raised private capital this year in the face of skepticism among potential public investors over the company’s governance, its business model and ability to turn a profit while continuing to grow. It would be particularly painful for investors who have given or committed over $10 billion to the company since it was founded in 2010.

Should We yank or postpone the IPO, it stands to miss out on nearly $10 billion needed to fund its ambitious but money-losing global-growth plans. The company was planning to raise $3 billion to $4 billion in the IPO and up to $6 billion in debt that is contingent on the IPO raising at least $3 billion.

The company is continuing to talk to its biggest investor, SoftBank Group Corp., about whether the Japanese technology giant would put in additional capital through the IPO by buying a significant portion of the shares on offer or invest a chunk of money that would allow We to delay its IPO until 2020.

stank

Clear sign that investors are starting to realize how none of these tech companies that have recently IPOed are real businesses. They aren’t profitable, just zombies that need more and more debt to stay alive. Just a matter of time for the bubble to burst.

How much is are these guys losing a year? That’s my first question on all IPOs these days.

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