The main reason for the Softbank Group’s request for suspension of listing is that the interest from investment institutions in buying stocks is currently very cold.
Editor’s note: This article is from “Tencent Technology“, review: Cheng Hey.
WeWork is currently in the process of going public, but for various reasons the valuation of the company has plummeted, which has brought huge losses to existing shareholders. According to the latest news from foreign media, WeWork’s largest shareholder, Japan Softbank Group, has requested the company to suspend its listing.
According to foreign media reports, the main reason for Softbank Group’s request for suspension of listing is that the interest from investment institutions in buying stocks is very cold.
The Softbank Group is the largest investor in WeWork (the Softbank Group and the vision fund managed by the company have invested more than $10 billion in WeWork) and will naturally become the biggest victim of the company’s valuation collapse. It is reported that WeWork’s valuation has dropped from the last $47 billion of Softbank Group’s investment transactions to $20 billion, and the underwriters are still considering lowering the price of the shares, and the valuation may fall below $20 billion.
Earlier, the US Goldman Sachs Group even announced that WeWork’s future valuation could reach $65 billion.
According to the latest news from foreign media, WeWork’s listing consultants and underwriters are currently evaluating the interest of various investors in the company’s IPO to see if they can accept the valuation of 15 billion to 20 billion US dollars and the price of new shares. .
At present, WeWork is also facing a dilemma. Last weekend, the company contacted Softbank Group to discuss whether to obtain new financing from Softbank Group and then suspend the listing plan. However, the company’s CEO, Neumann, hopes to continue to advance the current listing plan.
It is worth mentioning that WeWork’s past and bank credit arrangements have provisions related to listing transactions. Only when the company raises at least $3 billion through listing, will it be able to obtain billions of dollars in loans in the future.
In response to the request of the Softbank Group to suspend the listing plan, WeWork related persons said that the company is currently in the quiet period of listing, so it is not convenient to comment on such issues.
WeWork suffered a cold spot for investors before it went public, and its valuation plummeted. This is actually not surprising. In the past year, the attitude and evaluation criteria of the US capital market for newly listed technology companies have changed. Some new concepts and new stories have been unable to attract investors to buy stocks. Investors require companies to have a clear profit model and profitability. schedule.
Before, the two major online car giants in the United States, Lyft, Uber listed on the US stock market, stock price and market value suffered a sharp decline, both listings were considered a failure. The main reason is that the two companies suffered serious losses and could not get a clear profit schedule.
It has also been reported that some investors believe that WeWork’s business model (rental office buildings, refurbished and then rented out at high prices) is just a traditional real estate company, and a group of traditional real estate companies are also engaged in the same business as WeWork. Therefore, WeWork should not get a high valuation from technology companies.