Wework today confirmed it will withdraw its initial public offering (IPO) filing after it was forced to push back plans for its troubled float.
The coworking firm last week announced that Adam Neumann would step down as chief executive following a frosty reception from potential investors, who raised concerns about the company’s business model and corporate governance.
“We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong,” Wework’s newly appointed co-chief executives Artie Minson and Sebastian Gunningham said.
“We have every intention to operate Wework as a public company and look forward to revisiting the public equity markets in the future.”
Wework’s decision to shelve its public listing has sparked questions about the viability of loss-making tech firms that secure lofty valuations.
The flexible workspace firm had received a valuation of $47bn (£38bn) after a funding round from Japanese investor Softbank earlier this year. However, the IPO would likely have achieved a valuation of closer to $15bn.
Accounts published in Wework’s filings showed the firm has spent $2 for every $1 it made in revenue, and analysts have warned that its cash-burning strategy was not sustainable.
Investors also raised concerns about the behaviour of the company’s executives, and boss Neumann said the scrutiny directed towards him had become a “significant distraction”.
Wework is reportedly preparing to sell Neumann’s $60m private jet in a bid to soothe investor concerns. Reports have emerged that the former chief executive smoked cannabis on a jet while travelling between the US and Israel.
Despite the difficulties, Wework has insisted it will pursue the public listing, and said it still plans to float before the end of the year.
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