Reports have revealed that SoftBank is urging WeWork to hold off on its initial public offering after valuing the coworking firm at $47 billion through its $10 billion investments into the coworking firm.
Despite this, WeWork is planning to press forward according to Reuters. Looking at the bigger picture, it appears that WeWork and SoftBank truly are two peas in a pod.
WeWorkโs S-1 filing revealed its goal to โelevate the worldโs consciousness,โ which may have offered a nervous chuckle from critics, but is it much different from SoftBankโs mission to deliver โhappiness for everyone?โ
One clear factor the two firms share are their leaders. WeWork CEO Adam Neumannโs majority voting rights gives him the freedom to control who is on his board, while SoftBankโs Masayoshi Son ultimately has the end say over the Vision Fundโs investments.
Another similarity the two share is how they report their finances. SoftBankโs earnings are fluffed up by โfair valueโ gains on its investments, despite some of these documented profits being wishful thinking. WeWork, while still unprofitable, tries to make it seem like it is by adding back basic expenses at a โcontribution margin.โ
Still, WeWork received its first SoftBank investment in 2017, so it might be a reach to blame Son for questionable practices revealed in the coworking firmโs prospectus. Regardless, it is uncanny.
Now, WeWork must choose between delaying its IPO to raise funding from its biggest backer, or go ahead with the offering to the potential disappointment of Son.
