WeWork officially pulls plan for stock market listing

Image source, WeWork

Image caption, Inside a WeWork office

30 September 2019

WeWork has officially scrapped plans to sell shares on the stock market, saying that it will instead "focus on the core business".

The decision comes after the property company's offering in August sparked little enthusiasm from investors, who had questioned the firm's finances, governance and leadership.

Last week, co-founder Adam Neumann resigned as chief executive.

WeWork said it still planned to become a public company - eventually.

"We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong," the firm's new bosses, Artie Minson and Sebastian Gunningham, said in a statement.

"We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future," they added.

Sinking valuation

Founded in 2010, WeWork expanded from a single co-working space in New York City to an international business operating in more than 500 locations.

But the firm, recently renamed the We Co, continues to post significant losses, burning through more than $900m in the first six months of the year.

The share offering had been intended to raise much needed cash for the firm, but it quickly ran into trouble.

Reports suggested the firm's expected valuation had sunk to between $10bn and $12bn, compared to the $47bn (£37bn) it fetched during Japanese investment giant Softbank's most recent investment round.

Acknowledging the questions, the company earlier this month said it would postpone the offering, but it still hoped to complete it by the end of the year.

On Monday, WeWork said it was notifying the US Securities and Exchange Commission that it would withdraw its prospectus. It did not say when it might make a second attempt.

Executives are also said to be contemplating job cuts and other ways to cut costs.