WEWORK INVESTORS SHOWING CAUTION

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, which owns or leases office space and then rents it to companies typically needing short-term space, had planned to hold a roadshow to promote the offering as soon as this week, an executive told analysts last week. Representatives for SoftBank and We, the parent 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 pitched WeWork as a $65 billion (R959bn) business. But when the company filed a preliminary prospectus last month it revealed the company had racked up billions in losses, was burning cash and had an arcane corporate structure riddled with potential conflicts. In just the first six months of 2019, WeWork lost $690 million, bringing its total losses to almost $3bn in the past three years, the filing showed. Now WeWork advisers are estimating the company is worth less than a third of Goldman’s figure. SoftBank Group and its affiliates hold about 29 percent of WeWork stock, it was reported last week. That’s even more than co-founder and chief executive Adam Neumann holds, though he maintains effective voting control through a three-class share structure. SoftBank has invested a total of about $10.65bn in the New York-based company, but that has been at a range of valuations. SoftBank’s Vision Fund invested just once at about a $20bn valuation in early 2017, while SoftBank Group kept pouring money into WeWork, most recently in January at a $47bn valuation. I Bloomberg