After WeWork’s biggest backer SoftBank dropped its proposed $16 billion investment down to $2 billion, the company’s $47 billion valuation also dropped. The major coworking firm is expected to file for an IPO this year, which is now currently valued at $20 billion.
Despite this, WeWork’s CEO Adam Neumann claims that the reduced funding will not have an affect on their IPO after it gained about $2.5 billion in revenue, but the date of the company going public is still a mystery.
Such losses may continue to widen as the firm focuses on growth, which could be a concern for many investors.
WeWork’s original valuation was met with great skepticism, and now even investors from SoftBank are having their doubts of the company’s sustainability.
In addition to it’s valuation dropping, its bond trading value has also dropped and is currently trading at 86 cents on the dollar as the company has yet to become profitable over the past decade.
While it burns through its big investments, WeWork continues to grow rapidly and its IPO round it still expected to be successful. It currently has over 500 locations worldwide and in 2018, it doubled its memberships to 372,000.