WeWork (also known as The We Company), the well-funded if not quite fully-fledged management company for shared office and event space, had its wings clipped once again, just as it was getting ready to leave the nest.
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According to reporting from the Wall Street Journal, unnamed sources said today that the company, which was slated to begin its pre-IPO roadshow this week, has postponed its initial public offering until “at least” October.
Sources cited by the Wall Street Journal suggest that the delay was the result of ongoing governance and financial challenges at the company.
It’s important to remember that, at this point, the WeWork IPO story has been a pretty convoluted one to follow. “Conflicting reports” is a phrase that characterizes the coverage of the offering so far. Recent reports suggested that WeWork intended to delay its IPO, whereas others indicated the offering was going forward, full steam ahead.
Yet, the people best equipped to help the media and broader investing public open the box and collapse that uncertainty down to reality are no longer at The We Company.
Crunchbase News learned, and Business Insider wrote about, of significant turnover within The We Company’s central corporate communications team. Jennifer Skyler, the company’s first comms hire, formally left last week after giving up the mantle in April to join American Express. Skyler’s departure was followed shortly by her replacement, Dom McMullan, who also left last week after spending over three years at the company.
But the woes extend beyond The We Company’s comms group. So let’s get into them, chronologically.
The Market’s Reprice
On September 3, reports came out that WeWork, which raised $12.8 billion in primary, secondary and debt financing, according to Crunchbase, might cut its valuation by tens of billions. The company last had a private valuation of $47 billion, and reports said the company would target a valuation of between $20 billion and $30 billion.
About a week later, The Financial Times reported that SoftBank, which has invested billions in the company, has asked WeWork to shelve its IPO. Not a good look when the entity that trusted you with billions of dollars in venture capital tells you to slow down your roll.
Then we learned that WeWork is shaking up is corporate governance and structure, which remains something of an organizational layer cake, before the IPO. The changes include re-weighting the supermajority voting shares held by Neumann and close associates from twenty times to merely ten times the voting weight of regular shareholders. Additionally, the board of directors now has the ability to fire Neumann, and Adam’s spouse, Rebekah, will have a reduced role in picking his successor, should Neumann be fired or otherwise become unable to lead the company.
And now we’re here. WeWork’s woes have caught up to it and made it take a breath.The controversial company, with staggering losses and a once historically-high valuation, isn’t joining the IPO parade until at least October. And even then, its appearance might fall short of a march.
Illustration: Li-Anne Dias