JPMorgan CEO says has learnt a few lessons from the WeWork debacle

Jamie Dimon, Chairman and CEO of JPMorgan Chase & Co. speaks during the Milken Institute Global Conference in Beverly Hills, California, U.S., May 1, 2017. REUTERS/Mike Blake

Jamie Dimon says companies heading toward initial public offerings should first study WeWork’s startling fall from grace.

“I think there are lessons to be learned about these valuations, how you go public, how you treat the public shareholder — and those lessons should be learned by everyone who wants to go public,” Dimon, the CEO of JPMorgan Chase & Co., said in an interview Tuesday on CNBC. “I’ve learned a few myself.”

WeWork went from being one of the most-anticipated IPOs of the year to being a cash-strapped firm forced to accept a rescue package at a fraction of its previous valuation. The company had been valued as recently as January at $47 billion after an investment from SoftBank Group Corp., but last month turned to the Japanese conglomerate for a bailout that placed its worth at less than $8 billion.

JPMorgan had a lead role advising the office-sharing startup on its IPO. After those plans were shelved in September, the bank offered WeWork a $5 billion debt package that the company passed up in favor of the SoftBank rescue. Dimon said he never believed WeWork was worth $47 billion.

“Just because a valuation prints at a certain level by one investor doesn’t mean it’s the right valuation,” Dimon said. “That’s not price discovery. Price discovery is when a lot of smart people around the world knowing all the facts can kind of buy and sell all the time.”

He said private companies should also take more time to shore up corporate governance and disclosures before proceeding with an IPO. Investors raised concern about WeWork’s corporate governance after it filed its S-1, the registration filing required by the Securities and Exchange Commission ahead of going public.

“I think companies going public should have proper corporate governance before they file an S-1,” Dimon said. “You should have your independent board members before an S-1. You have to make sure you take a lot of time to go through how you disclose this stuff. Shareholders should be treated like partners.”

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.