WeWork has gone off-road.
The We Company, the owner of the shared-workspace provider WeWork, was scheduled to begin its "roadshow" for potential investors in its IPO on Tuesday, but now the high-flying company is expected to postpone both events until next month.
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WeWork faced concerns in the last few weeks about the sustainability of its business model, which relies on a mix of long-term liabilities and short-term revenue, according to Reuters. It also faces criticism of its governance standards, as founder Adam Neumann, according to Reuters, has 20 times the voting power of ordinary shareholders.
It has faced criticism from many potential investors. "WeWork might not be the largest IPO of 2019, but it is easily the most ridiculous, and the most dangerous," David Trainer, CEO of New Constructs, LLC, an independent research firm in Nashville wrote in Forbes last month. Trainer added that among WeWork's issues are "some of the worst corporate governance practices I’ve ever seen."
The company may now seek a valuation between $10 billion and $12 billion, way down from the $47 billion valuation it achieved through private capital in January.
WeWork is under pressure to secure an IPO, as demand is surging for companies that show can quickly be profitable, a report in the Wall Street Journal said. The valuation drop could hurt investors who have given or committed to over $10 billion to the company.