Owner of WeWork postpones IPO after cold response from investors

We Company, owner of WeWork, postponed its initial public offering of shares (IPO), leaving aside the preparations to launch it this month after a weak investor response to its plans. The American startup of shared offices was preparing for a road show of investors for their opening of capital this week before making the decision in the last hour on Monday to give up, said sources familiar with the Subject. The company is under pressure to proceed with the listing of actions to ensure financing for its operations. In Brazil, WeWork has operations in Belo Horizonte, Brasília, Porto Alegre, Rio de Janeiro and São Paulo. In the period leading up to the launch of its IPO, We Company faced concerns with its corporate governance standards as well as the sustainability of its business model, which is based on a mix of long-term liabilities and short-term revenue , and how this model would withstand an economic crisis. Reuters reported last week that We Company could seek an assessment on its IPO between US $10 billion and US $12 billion, a relevant discount compared to the US $47 billion assessment achieved in January. If We Company had followed with the IPO with such a low rating, it would represent a big turn in growth in the last decade of the venture capital sector, which led to the emergence of startups such as Uber Technologies, Snap and Airbnb. This would mean that We Company would be valued below the US $12.8 billion in equity it has raised since it was founded in 2010, according to the Crunchbase data provider. And that would be a scam for its biggest sponsor, the SoftBank Group Corp, of Japan, at a time when it is trying to gather $108 billion with investors for its second Vision Fund. SoftBank was discussing supporting the IPO by buying shares between US $750 million and US $1 billion, the sources said. However, We Company decided on Monday that, even with the support of SoftBank, the IPO would have raised just over US $2 billion, below the target of at least US $3 billion. This goal is linked to a $6 billion credit line that We Company secured to banks last month, which requires it to make a capital opening by the end of the year and to raise at least US $3 billion, one of the sources said. If the company headquartered in New York does not meet this goal by the end of the year, it will need to ensure alternative financing. The Wall Street Journal reported for the first time about the possible delay of the IPO. The last time SoftBank invested in We Company was in January, evaluating the company at US $47 billion by injecting US $2 billion in cash. He was pushing the company to postpone his IPO.