Even if Softbank is suffering, it can only go on with the scalp.
Editor’s note: This article is from WeChat public account “Shengjing Industry Internet Watch” ( ID: sjwl360), author Chen Xi.
WeWork is Manhattan’s largest real estate tenant, subverting traditional commercial real estate. Originally planned to carry out an IPO in September 2019, it seems that there is a “crisis”.
According to a person familiar with the matter, WeWork’s parent company, WeCompany, is considering postponing the IPO until the earliest October. The company is worried that the IPO will be left out by a large number of investors.
This US shared office space startup is preparing for an IPO investor roadshow. The company hopes to get its working capital through listing, but the listing plan is under pressure.
The valuation is seriously shrunk, and softbank is a disadvantage
It is understood that We Company seeks to be 10-12 billion The US dollar is valued for an IPO, which is a significant drop from the January estimate of $47 billion in January.
In the first two days, it was reported that SoftWork, the largest shareholder of WeWork, proposed the company’s suspension of listing because the interest of major investment institutions in purchasing stocks was significantly reduced, and even the valuation may fall to 10 billion US dollars. .
Subsequently, Softbank announced plans to subscribe for at least $750 million in WeWork’s next month’s IPO, which is to subscribe for 25% or more of the shares issued by WeWork.
According to this figure, WeWork should raise more than $3 billion, but the valuation is basically between $15 billion and $20 billion. For Softbank, even if it is a loss, it can only go on with the scalp..
It has been speculated that investors are concerned about the sustainability of corporate governance standards and business models. The company’s business model relies on a collection of long-term liabilities and short-term income, and investors are skeptical about whether this business model can withstand the impact of the economic downturn.
So it seems that We Compan’s IPO plan in September will be ruined.
WeWork’s situation,Neuman can’t take care of it
It is speculated that WeWork postponed IPO and Neumann Can’t work.
Related sources revealed that all staff meetings originally scheduled to be held at the headquarters in New York on Thursday were cancelled. Chief financial advisers – JPMorgan Chase & Co and Goldman Sachs Group Inc. are concerned that an initial public offering could make the company worth less than $15 billion.
Regarding the detailed topics of the meeting, all participants were asked not to be public because the content of the interview was confidential.
The cancellation of this meeting was due to the conflict of opinions of executives and the cancellation of the meeting.
The topic of this meeting may be that investors are demanding corporate governance reforms to make IPOs more suitable for potential investors. The focus must be on Neumann.
The outside world believes that any decision of WeWork can ultimately only depend on Neumann. He controls voting rights through the company’s Class B and Class C shares and is a strong supporter of the IPO.
After the IPO prospectus disclosure, some issues have been disclosed. Neumann used the company’s name to make loans and leased the money to buy his own business. In addition, he sold a large number of shares before the IPO, and family members were criticized for important positions in the company.
According to the prospectus, the company rented office space in four buildings owned by Neumann, and he signed three related leases on the day of the acquisition.
The information disclosed, as well as the billions of dollars in losses the company has faced in recent years, has increased investor unease.
Under the WeWork prospectus, failure to go public as scheduled means WeWork will not be able to secure a $6 billion credit facility because the precondition for a $6 billion line of credit is that WeWork raises at least $3 billion in the IPO.
So it seems that WeWork is in a very anxious situation.
The loss will exceed $4 billion, how will it end?
It is understood that WeWork has accumulated losses of over 40 in the last four years. Billions of dollars still have not achieved profitability.
In order to maintain rapid expansion, WeWork has raised billions of dollars in financing through multiple financing instruments.
When WeWork went public, it also issued a portion of the stock to the executive team represented by founder Newman.
The US Securities and Exchange Commission (SEC) official website shows that WeWork has completed a total of four non-public offerings since 2019, with a cumulative amount of approximately $140 million.
In May 2019, WeWork successfully received more than $100 million in funding from 90 investors.
In July 2019, WeWork issued a non-public offering of 6,24,590 US dollars to 17 qualified investors, and finally only raised $5,260,800, with a subscription rate of approximately 84.2%.
In July 2019, WeWork also issued a non-public offering of 1,299.9 million yuan to 103 qualified investors, and the financing was successfully raised in full.
In August 2019, WeWork issued a non-public offering of 18,723,700 US dollars to 18 qualified investors, and finally successfully subscribed for $16,786,600. The subscription rate was approximately 91.6%.
On the eve of the listing, financing is enough to prove WeWork’s thirst for funding. If it can’t be listed as scheduled, how long will WeWork last?
Where WeWork, valuation waist, investors fear, IPO extension, WeWork worth $47 billion will be too high? How will this embarrassing situation end?