WeWork’s parent is eyeing a valuation for its initial public offering that could fall below $20 billion as some existing investors push the workspace company to shelve the planned offering, people familiar with the matter said.
Despite plans to begin a roadshow to market the shares to new investors as early as Monday, We Co. and its underwriters are planning to hold meetings this week among themselves and with investors to figure out what changes may be needed to help garner enough demand for an IPO, the people said.
A valuation below $20 billion would be an even steeper drop from the $47 billion mark where We last raised private capital this year in the face of skepticism among potential public investors over the company’s governance, its business model and ability to turn a profit while continuing to grow. It would be particularly painful for investors who have given or committed over $10 billion to the company since it was founded in 2010.
Potential investors have been unnerved by co-founder and Chief Executive Adam Neumann’s sales of hundreds of millions of dollars of his stock and loans of more than $740 million tied to his shares in the company, according to Wall Street Journal reports and regulatory filings. Neumann also controls a majority of the voting rights of the company and recently doubled the potency of his supervoting shares.
An expanded version of this report appears on WSJ.com.
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