Softbank urges WeWork to shelve IPO over valuation worries:The Asahi Shimbun

WeWork Considers Valuation Cut As Investors Question IPO Values

The newspaper's latest report said potential investors have been unnerved by We's co-founder and chief executive Adam Neumann's sales of hundreds of millions of dollars of his stock and loans of more than $740 million tied to his shares in the company.

SoftBank and its Saudi-backed Imaginative and prescient Fund have invested greater than $10 billion in WeWork.

But on Tuesday, CNBC reported that WeWork meant to forge ahead with its roadshow, in which the company pitches itself to potential investors.

Fast-growing office-sharing start-up WeWork plans to again cut its valuation, this time to below US$20 billion, and is under pressure from some investors to postpone its stock market debut, sources said on Sunday.

The company intends to raise up to $4 billion through its IPO, while securing an additional $6 billion in debt, provided its public offering generates at least $3 billion, according to sources familiar with the matter.

In the span of a few months, WeWork has gone from one of America's most valuable unicorn startups to a punchline in investment circles.

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The valuation for the money-losing USA office-sharing startup could be as low as $15 billion-$18 billion, one of the sources with direct knowledge of the matter said, roughly a third of the $47 billion We Company was valued at when Softbank made a follow-on investment in the company.

A WeWork spokesperson told Business Insider: "The company is in a quiet period and will politely decline to comment". WeWork's underwriters are additionally planning to fulfill with traders to debate doable adjustments to make sure a profitable IPO, The Journal mentioned. Early this year, Goldman Sachs Group pitched WeWork as a US$65 billion (S$89.73 billion) business.

Given its need for cash, a postponement of the IPO would be feasible if SoftBank would inject more cash into WeWork, a proposition Son has so far been reluctant to pursue given how much the fund has already put in, according to two sources.

The tech conglomerate has burned through much of the $100 billion raised by its first Vision Fund in just two years, recording big paper gains on internal revaluations of its tech investments.

Vision Fund defends its valuation techniques, which include cash-flow analysis, recent transactions and comparison with peers to underpin its numbers. (NASDAQ: LYFT), which both hit all-time low share prices last week.

If a tech company shelves an IPO due to a lower valuation than expected, investors are generally expected to take that fall into account when appraising their stakes.

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