WeWork’s planned IPO is looking increasingly shaky.
The Wall Street Journal reported Sunday that WeWork’s parent company, We Co., is aiming for a valuation of under $20 billion when it goes public, down from the $23 billion range being discussed recently.
What’s more, some investors are worried enough about weak demand that they are urging the company to call off the IPO entirely. On Monday, the Financial Times reported that one of them is SoftBank, We Co’s biggest investor, which last put money into We Co at a valuation of $47 billion.
The workspace company’s reputation has taken hits over the past few months about its weakening valuation, defections from its HR department, questionable corporate governance practices and its tough path to profitability.
As we reported last week, some of WeWork’s costs to open new locations have been rising, a potentially worrying sign for a company that has staked its appeal to investors in part on its rapid growth. WeWork knows investors haven’t been kind to big startups that went public before they could demonstrate how they would make money. The question now is whether it can garner fresh support from SoftBank, its biggest outside shareholder, and make other moves to shore up its standing.