Executives of WeWork and its largest investor, SoftBank, are discussing whether to shelve plans for an initial public offering of the money-losing co-working company, said people with knowledge of the talks.
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. WeWork had planned to hold a roadshow to promote the offering as soon as this week, an executive told analysts on Wednesday.
The Financial Times reported on SoftBank’s position earlier Monday. Representatives for SoftBank and We Co., the parent company of WeWork, declined to comment.
In the span of a few months, WeWork has gone from one of America’s most valuable unicorn startups to a punchline in investment circles. Early this year, Goldman Sachs Group Inc. pitched WeWork as a $65 billion business. Now WeWork advisers are estimating the company is worth about a third of that amount.
SoftBank Group Corp. and its affiliates hold about 29% of WeWork stock, Bloomberg reported last week. That’s even more than co-founder and Chief Executive Officer Adam Neumann, though he maintains effective voting control through a three-class share structure.
Neumann has been the subject of scrutiny from investors over disclosures in WeWork’s IPO paperwork. The company paid Neumann rent and spent $5.9 million to acquire a trademark he owned, as it lent him money. In recent months, WeWork has sought to address some of its governance issues, including adding a woman to its board.