Many banks who own stakes in WeWork are feeling the repercussions of the firm’s failed initial public offering attempt.
These banks are expected to report investment losses in third-quarter results that will come out starting on Tuesday.
WeWork’s disaster attempt to go public has caused the market for IPOs to halt, and may prove that the global economic slowdown is trickling into the U.S.
“Estimates fall for most, risks rise for all,” said analysts at Keefe Bruyette & Woods analysts in a report. “No bank is immune to today’s challenges.”
Goldman Sachs, which was set up to help underwrite the coworking firm’s IPO, is expected to experience $250 million in losses. Additionally, Jefferies Group already disclosed a $150 million loss in WeWork just last week.
While investment losses are a normal cycle of the market, WeWork’s debacle putting the IPO market on hold could be bad news for Goldman Sachs and Morgan Stanley.
