WeWork’s valuation had plummeted in the recent times. The company has been in the light for all the wrong reasons. And following this, the embattled founder and CEO of the firm Adam Neumann is “stepping down”, or more so he’s being “ousted” from the company’s chief position. He will be replaced by two co-CEOs: Artie Minson, formerly the company’s co-president and chief financial officer; and Sebastian Gunningham, who was vice chairman. Reports say that The We Company will file to withdraw its initial public offering, as it had stated on Monday.
The company was initially backed by SoftBank and this firm as a “startup” is now considering new ventures to raise funding for its growth (this includes SoftBank Corp). On the flip side, the company is currently looking to trim its workforce and to slow down its expansion in order to burn through less cash and be less dependent on fresh funding. Yes its prospective seems a bit unclear lately.
The We company had postponed the share sale earlier in September, following push-back from perspective stock market investors over its widening losses and it wasn’t surprising when the company decided to postpone its IPO.
WeWork’s newly appointed co-CEOs Artie Minson and Sebastian Gunningham had a lot to say about their ideas on Monday . They remarked, “We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong, we have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future.”
As mentioned earlier, SoftBank had invested a lot of resources on the company. Figures speak of SoftBank owning nearly a third of the We company – the firm had invested a $47 billion valuation in January. But WeWork fell prey to investor skepticism that led to it earlier this month considering a potential IPO valuation of as low as $10 billion. To add to that, Nikkei now reports that breakeven valuation for Softbank (where it wouldn’t make or loose money) was somewhere around $24 Billion. WeWork’s current market value is well below that and could result in losses as much as $1.3Bn for Softbank Vision fund alone.
Earlier it was said that “WeWork is committed to the future”. However after Adam’s leave followed by its new CEOs joining the office and the company’s IPO being postponed, it’s hard to imagine what the future has in stock for this office-sharing startup.
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