SoftBank urges WeWork to shelve IPO over valuation concerns: FT

WeWork Considers Valuation Cut As Investors Question IPO Values

WeWork Considers Valuation Cut As Investors Question IPO Values

It is the second time in three days that the company has cut its valuation target, after sources said on Thursday last week that its parent, The We Co, was revising it down from US$47 billion to US$20 billion over doubts about its prospects from potential investors.

The troubles for We Company and its primary business WeWork are mounting as reported that the company's essential backer, Softbank, is pushing for the company to put its troubled public offering on hold.

Citing sources accustomed to the company and its primary investor, the Monetary Occasions mentioned that the cold reception We Firm has obtained from public market investors.

Softbank Group, a top shareholder in the holding company of USA office-sharing startup WeWork, is urging it to shelve a planned IPO on concerns over the valuation that can be achieved in a listing, the Financial Times reported on Monday.

SoftBank and its Saudi-backed Vision Fund have invested more than $US10 billion in WeWork.

Such a low valuation could be a boon to investors.

Returns for SoftBank first Vision Fund have already been hit by lackluster listings of Uber and Slack.

WeWork planned to raise $3 billion to $4 billion by going public and secure another $6 billion in debt contingent on its IPO raising at least $3 billion, The Journal said.

WeWork, which rebranded as the We Company earlier this year, has emerged as one of SoftBank's biggest bets.

Other sources stressed the situation was still in flux.

SoftBank is pressing WeWork to postpone the stock offering after investors expressed serious concerns about the business and its corporate governance, said the people, who asked not to be identified because the discussions are private.

Tech conglomerate SoftBank 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.

SoftBank says many investments receive a vote of confidence as third parties come in as co-investors or by making follow-on investments at the same or higher valuations.

While SoftBank and its Vision Fund emphasize their long-term investing credentials, founder and CEO Son has set out an ambitious IPO pipeline for tech investments spanning ride-hailing, fintech and health startups.

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