We Company IPO Status Uncertain

We Company is moving ahead to roll out an investors’ roadshow as it looks for an initial public offering (IPO) as early as next week, sources told Reuters on Friday (Sept. 6).

The company’s IPO was deemed controversial after U.S. discussions estimated it could be valued at just slightly more than $20 billion. That figure is less than half of its $47 billion valuations following January’s fundraising round.

An IPO roadshow could allow We Company to offer a better valuation to investors. A We Company valuation drop would be a major upset that would affect existing investors such as Japan’s SoftBank Group Corp. 

Sources told Reuters that no final decision on beginning the roadshow has been taken, and plans are still subject to change.

An IPO roadshow is typically a “10-day period when companies solicit feedback from investors with the aim of convincing them to buy shares in the IPO. We Company would be hoping to convince investors to give it a valuation closer to what its venture capital backers placed on it.”

We Company rents out workspace to clients under short-term contracts and pays rent for the properties under long-term leases.

The New York-based company lost more than $900 million in the first half of 2019, up 25% from a year earlier, even though its revenue doubled to $1.54 billion, as it burned through cash to expand.

WeWork, which recently renamed itself The We Company, has built a multibillion-dollar valuation with its business model of renting out spaces. The company now wants to expand into owning the buildings as well, according to a report from CNBC.

The company is starting a “global real estate acquisition and management platform” to purchase stakes in buildings that it plans to lease, according to a press release. The fund will be called ARK and will start with $2.9 billion of total equity capital.