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Home / Business / WeWork is & # 39; poster child & # 39; for the failure of the IPO: Dan Ives

WeWork is & # 39; poster child & # 39; for the failure of the IPO: Dan Ives



WeWork's IPO preparation has been a roller coaster, and Friday brought another surprising piece of news.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Not long after Softbank valued the company at 47 billion, it was reported that WeWork would apply for a & nbsp; valuation between $ 10 and $ 12 billion a big discount to the $ 47 billion valuation it obtained in January – and that has probably spooked investors. of the lower valuation, the company's S-1 filing changed its & 1945; corporate governance structure including limiting the voting power of CEO Adam Neumann, as well as removing a clause that allowed Neumann's wife, Rebekah, to choose his successor should he withdraw. "data-reactid =" 16 "> Not long after Softbank valued the company at $ 47 billion, it was reported that WeWork would seek a valuation between $ 10 and $ 12 billion, a major discount to the $ 47 billion valuation it achieved in January – and that probably has investors spooked. On top of the lower valuation, the company's S-1 filing changed its corporate governance structure, including limiting the voting power of CEO Adam Neumann, as well as removing a clause that allowed Neumann's wife, Rebekah, to choose his successor should he resign.

For some investors, this is a sign of avoiding the company's impending public offering.

"Well, if you take a step back, that's really what's going on broader in the stock market, and I think this all started with Uber and Lyft," said Dan Ives, a Wedbush Securities analyst for Yahoo Finance. "I believe WeWork has really become the poster child" for problematic technical IPOs, he said.

<p class = "canvas-atom canvas text Mb ( 1.0 em) Mb (0) – sm Mt (0.8 em) – sm "type =" text "content =" It's been a tough year for IPOs, with & nbsp; Uber & nbsp; Lift and Slack & # 39; s ( WORK ) shares – all disposable unicorns – and with a steady decline since publication. Investors pump capital to companies whose business models are foreign and not proven in the public markets, such as & nbsp; proven by Uber's & nbsp; ( UBER ) billion dollar loss quarter after quarter. Another example: Slack recently had losses more than ten times greater than before the IPO. "data-reactid =" 19 "> It's been a tough year for IPOs, with Uber, Lyft and Slack (WORK) shares – all at once unicorns – and everything in constant decline since disclosure. Investors are pumping capital into companies whose business models are foreign and not proven in the public markets, as shown by Uber's $ 1 billion quarter-on-quarter loss. Another example: Slack recently had losses more than ten times higher than before the IPO.

"It's not just WeWork, "Ives said." Others are looking at this because it only speaks to what we see in the stock market. It's definitely a fork in the road. "

<p class =" canvas-atom canvas text Mb (1.0em ) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" "You see some of these names as Zoom ( ZM ), Beyond Meat ( BYND ) – strong business models, you see the shares go similar, others, especially if you look at Uber and Lyft ( LIFT ) they have really become the poster child for what we see, "he said." Data-reactid = "21"> "You see some of these names like Zoom (ZM), Beyond Meat (BYND) – strong business models. You see the shares go accordingly. Others, especially if you look at Uber and Lyft (LYFT), they really have become the poster child for what we see, "he said.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "WeWork's business model is hinged on an unmanaged business – real estate. It also uses short-term leases, usually no longer than 15 months, for its spaces, and creates constant customer turnover. The company does not have & # 39; t showed that it solved some of their problems, & nbsp; posted annual losses & nbsp; $ 1.9 billion in 2018 and hourly losses of $ 217,000. "data-reactid =" 33 "> WeWork's business model is linked to an unmanaged business property, and it also uses short-term leases, usually no longer than 15 months, for its spaces, and generate constant customer turnover. The company has not shown that it has solved any of its problems, and has posted annual losses of $ 1.9 billion in 2018 and hourly losses of $ 217,000.

WeWorks IPO roadshow starts next week in anticipation of its listing on September 23. [19659011] "They must prove to investors that there is finally a way here, not only to profitability, but growth. When you look at many of these other issues, I think the tolerance you see in this market is reduced in terms of what investors are willing to look past, "Ives said." And what we've seen in many of these other IPOs is that now you're on the other side of the cycle. Investors basically start is to say right here, as if they would not just invest based on some kind of hope and prayer. ”

<p class =" canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Ashley is the production assistant for Yahoo Finance Follow her on Twitter @actuallynelson "data-reactid =" 36 "> Ashley is a production assistant for Yahoo Finance. Follow her on Twitter @actuallynelson

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<p class =" canvas atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" WeWork & # 39; reasonable valuation & # 39; : IPO Expert "data-reactid =" 40 "> We Labor & # 39; must give us a fair value assessment & # 39 ;: IPO Expert

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