WeWork IPO to be delayed amid valuation concerns

WeWork owner The We Company is likely to delay its highly-anticipated its initial public offering (IPO), the Wall Street Journal has reported. The office space manager, however, still expects to complete its float by the end of the year.

WeWork delays IPO

The WSJ reported this morning that WeWork, which had been gearing up for an investor roadshow for its IPO this week, is expected to postpone its float after investors questioned how much the company is worth and raised concerns about its corporate governance. Sources with knowledge of the matter told the newswire that WeWork’s market debut is likely to be shelved until at least next month.

“The We Company is looking forward to our upcoming IPO, which we expect to be completed by the end of the year,” the office space manager said in a short statement. “We want to thank all of our employees, members and partners for their ongoing commitment.”

Valuation concerns

The news comes after the company’s biggest outside shareholder, Japan’s SoftBank, urged WeWork to shelve its float amid valuation concerns. Reuters reported last week that We Company might seek a valuation in its IPO of between $10 billion and $12 billion, marking a dramatic drop from the $47 billion valuation the office space manager achieved in January.

Reuters quoted sources as saying that SoftBank was discussing supporting the IPO by snapping up shares worth between $750 million and $1 billion. The We Company,  however, reportedly decided that even with the Japanese group’s support, the float would have raised a little over than $2 billion, short of its target of at least $3 billion.

WeWork moved to assuage corporate governance concerns last week, announcing a string of changes, including reducing the voting power of co-founder Adam Neumann. The office space manager said that it was introducing the changes in response to market feedback.