WeWork 'may delay stock market listing'


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WeWork

The hotly-anticipated stock market listing of WeWork’s parent company could be delayed until at least October, according to reports.

We Company’s planned flotation has been dogged by worries that investors are going cold on the office sharing firm, once valued at $47bn (£37.8bn).

Several reports citing unnamed sources, including the Wall Street Journal, said a delay was now being considered.

We Company was due to start marketing the business to investors this week.

The possible delay comes after Reuters reported last week that We Company may seek a valuation in its IPO of between $10bn and $12bn, a sharp discount to the mooted $47bn price tag suggested in January.

In the past few months, We Company has faced concerns over its corporate governance standards, as well as the sustainability of its business model, which relies on a mix of long-term liabilities and short-term revenue.

Possible roadblocks

Critics say WeWork’s model could leave it vulnerable during an economic downturn.

The company rents office space for the long term, subletting that space to firms and individuals on more flexible lease terms. That could leave it on the hook for lease payments even if tenants grow scarce.

WeWork has also faced questions about its complicated financial ties to founder chief executive, Adam Neumann, who would retain voting control of the company.

Earlier this month, founder Adam Neumann returned $5.9m worth of stock to the firm, which he had controversially received in exchange for his trademark of “We”.

Concerns about slowing global growth could also contribute to a difficult ride in the public markets, as seen in other high-profile offerings this year, such as Uber.

Since WeWork’s start in New York in 2010, it has expanded to more than 500 locations in 111 cities across 29 countries.

However, that rapid expansion has been expensive. WeWork lost about $1.6bn last year, despite revenue nearly doubling.



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