Sources have revealed that the We Company is reconsidering going forward with its initial public offering later this month.
While no official decision has been made, reports say that WeWork has had talks with SoftBank about an investment that would push the company’s public offering to 2020. SoftBank and its affiliates have invested about $10 billion into the company and own about 29% of WeWork.
Additionally, sources say that the company is weighing whether to slash its massive $47 billion private valuation by over half.
One of the main reasons to go public is to access capital. If SoftBank does not provide WeWork with capital to keep its valuation afloat, it may be forced to move forward with the IPO. This is particularly the case because the company’s $4 billion debt raise is contingent upon the company having a successful IPO.
Overall, things are looking grim for WeWork’s IPO. So far, large institutional buyers have already decided to pass on the company due to details emerged from its S-1 filing, and the looming economic downturn will likely hurt the company’s prospects in the public markets.
In the defense of sustainability through a recession, CEO Adam Neumann said WeWork has already survived downturns in other countries and the flexible nature of this business is beneficial in such an economy.