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Which of the above would apply to We’s IPO strategy?News came late this week that the parent company of the shared working space firm WeWork is mulling whether to go public at what is being reported as a “significant discount” to valuations seen the last time it raised money through the private markets.
In terms of the numbers, the We company may value itself at $20 billion to $30 billion, as The New York Times reported which would be a significant leg down from the $47 billion valuation that had been in place at the beginning of the year.
To give an indication of just where things may stand, the unnamed sources quoted by The Times said the valuation could be closer to $20 billion.
It should be noted that WeWork posted an operating loss of $1.7 billion last year, on revenues of $1.8 billion.
In what looks like a move to avoid a rocky IPO, WeWork’s CEO Adam Neumann has met with mega-investor SoftBank to see if the Japanese firm might take an even larger stake than the $10.5 billion already on the books to the tune of a few billion dollars.
In a rough economic climate, there could be a mismatch, where space goes empty or leases for less money than might be ideal and in the meantime, the company has to keep paying the billions of dollars of in-place obligations.