WeWork, the latest ‘unicorn’ company to set its sights on stock market floatation, has been facing increasing doubts about its debut on the NYSE this year.
International investors have been eagerly anticipating WeWork’s debut, but major shareholder SoftBank has reportedly asked the company to pause its plans and even drop them altogether due to fears of a drop in share prices.
This is in response to reports that outside firms are not valuing WeWork as highly as they did over a year ago when the plans were first announced.
SoftBank Influence
SoftBank, the Japanese investment firm that owns a 30% stake in WeWork, is worried that their initial valuation of approximately $47bn was too high. If the company were to float, investors may be disappointed by early share performance.
There is growing concern that their own shares could be worth less than $20bn if the company were to go ahead with its plans to join the stock market.
WeWork
The company sells working office spaces to companies and individuals (including day traders via etradinghq). Critics have warned that WeWork may be more susceptible to big losses if they float in the event of an economic downturn.
Like many of its high-risk neighbor companies, WeWork loses huge amounts of money despite ever-growing revenues.