We Company Looking At An IPO

Published on January 11, 2019 - By Cecilia Amador de San José

• We Company, the new parent company of WeWork, is reportedly considering an IPO
• If We Company issues an IPO, it will “have to justify its new $47 billion valuation”
• The move comes amid SoftBank’s new $2 billion investment, which was much lower than its initial $16 billion

The Real Deal recently reported that We Company, the new parent company of WeWork, “is weighing the prospect of an IPO, much sooner than expected.” Rumors of WeWork issuing an IPO have been floating around for almost a year now but they seem to be increasing.

The news of an upcoming IPO now comes shortly after SoftBank Group slashed its investment in WeWork from $16 billion to $2 billion. If We Company issues an IPO, it will “have to justify its new $47 billion valuation”. The coworking giant might have a hard time doing that, especially considering experts have been skeptical about its valuation for years now and, most recently, even key investors from SoftBank are doubting the company’s potential and long-term success.

• Suggested reading: Wall Street Journal Confirms what Industry Experts have Said all along about WeWork

Furthermore, WeWork’s bond trading value has dropped significantly since it issued $702 million in “junk” bonds. It is currently trading at 86 cents on the dollar. The ten-year old company is yet to be profitable and just last year it quadrupled its losses to $1.2 billion.

“For now the decision for stockholders remains whether to cash out now at a lower $20 billion valuation, or hold out for the possibility of a successful IPO.”

While We Company hints at a possible IPO, rival International Workplace Group (IWG) has experienced quite a bit of stock activity since mid-December. If WeWork issues an IPO, it would drive IWG’s stock up significantly and the flexible workspace conglomerate might finally be able to close a deal with private investors.

Suggested reading: IWG Ends Takeover Talks with Private Equity Groups