WeWork’s delayed IPO left a nasty mark on Goldman Sachs, but not nearly as bad as analysts expected.
Stephen Scherr, the bank’s CFO, announced it lost about $80 million on its stake into the coworking firm during the third quarter.
WeWork’s valuation of $47 billion collapsed after its IPO plans for the year were scrapped, forcing Goldman Sachs to reset its valuation. Still, even if the stake falls further, the bank would continue to make money on it according to Scherr.
“Our carry value there is approximately $70 million, which is meaningfully higher than where our embedded cost is in that name,” said Scherr. “So if there was further downdraft, there is still embedded profit in the name itself.”
Goldman’s WeWork writedown was still smaller than the $264 million estimate of Morgan Stanley analysts Betsy Graseck.