- We Company said it still aimed to complete the flotation before the end of the year.
- It is also set to slash the supervoting power of its co-founder
- The company had already lost $1.9 billion last year, with revenues of $1.8 billion.
After receiving a mixed response from investors, WeWork, the US office-sharing company, has postponed its stock market flotation. Its parent firm- We Company was thought to be moving forward with listing on the Nasdaq next week.
But the sources told: “It’s likely going to be postponed, possibly to October at the earliest.”
The move is likely to spark new speculation about the company’s future approach, coming just weeks after reports that the New York-based firm was considering slashing dramatically the valuation it’s going to seek when it sells stock market stocks.
Sources said We Company is looking at an estimate of just over $20bn (£ 16.12bn), less than half the $47bn price tag it got in January’s personal fundraising.
The prospective reduced valuation represents nerves among prospective investors that, despite having expanded quickly to more than 425 places in 100 towns in just 10 years, the office-sharing start-up could never turn a profit.
On Monday, WeWork was anticipated to launch its IPO roadshow to market its stocks to prospective buyers.
The firm said it intended to trade under the inventory symbol “WE” in a filing with the U.S. Securities & Exchange Commission on Friday. But investors are cautious of the company’s value, which fell from $47 billion in January last week to less than $20 billion.
John Colley, Warwick Business School Associate Dean and IPO specialist, said: “After the latest crash of Uber and Lyft stocks after their original price offerings, prospective WeWork investors will have some valid questions. How much is the slick marketing really worth? And will it be long-term effective?”He observed the business is a long way from becoming lucrative and lost $1.9bn following last year’s revenues of $1.8bn. For every $1 of income it produces, it has continually lost $2.
“It’s also comparatively simple for fresh companies to join the market, perhaps in less expensive areas of the town, and because WeWork provides short-term agreements, if a better agreement goes along, it’s simple for tenants to move elsewhere. There’s no powerful reason for WeWork to be faithful,” said Colley.
The New York-headquartered company offers coworking, flexible workspace arrangements, and currently operates in 111 cities in 29 countries.
The company had already lost $1.9 billion last year, with revenues of $1.8 billion.