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What The Future Of WeWork Could Mean For Other Unicorns

Once upon a time, WeWork was seen as a shining trophy that was changing the office space industry indefinitely. With a $47 billion valuation and a goal to “elevate the world’s consciousness,” it seemed that the company was unstoppable down its path towards a successful initial public offering.

But just in the last week, the company’s valuation has been slashed by over half. Now, it is uncertain that the IPO will move forward at all. This, along with other worrying practices revealed in its prospectus, are likely the reasons that WeWork’s biggest shareholder SoftBank is urging the company to hold off on the IPO.

This could be a good thing for the market, as the past few years have seen several venture capitalists eagerly funding losses until they could exit their positions through a profitable IPO. This has led to numerous private companies achieving “unicorn” status, or receiving a valuation of $1 billion or more.

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Moreover, the company’s three-class stock structure that gives CEO Adam Neumann majority control over corporate policies is leaving investors lacking confidence in the company’s sustainability. Neumann is known for his questionable practices, such as selling the “We” trademark back to the company for $5.9 million and leasing his own buildings to WeWork.

While the company’s controversial business methods can be tweaked around, its financial losses are set in stone. In the first of 2019, the company has already experienced $904 million in losses.

ABOUT Aayat Ali
Aayat Ali

Aayat is an editor for the Daily Digest based out of Kentucky. She has worked with local coworking spaces since August of 2017 and enjoys taking her firsthand knowledge to write about the fascinating, constantly evolving world of flexible workspaces. Feel free to reach out to her at [email protected] View all posts by Aayat Ali

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