NEW YORK: WeWork owner The We Company faces strong headwinds in achieving its goal of launching an initial public offering (IPO) by the end of the year after postponing it this month, fund managers and capital markets professionals said.
The US office-sharing startup was getting ready to launch an investor road show for its IPO this week, before making the last-minute decision on Monday to stand down following a lackluster reception from investors, people familiar with the matter said.
Reuters reported last week that We Company was considering seeking a valuation in its IPO of between $10 billion and $12 billion, a dramatic discount to the $47 billion valuation it achieved in January.
We Company is hoping it can kick off its IPO as early as next month, once it has updated its quarterly earnings with what it hopes to be a strong financial performance between July and September, according to people familiar with its thinking. We Company declined to comment.
However, it runs the risk of coming up against weak IPO market demand because many fund managers become more risk-averse in the fourth quarter, as time runs out to make changes to their portfolio before they close their books for the year.
“WeWork’s decision to delay its IPO only days before the road show, until sometime before year-end, hinders its ability to control the narrative,” said Dan Morgan, portfolio manager at Synovus Trust in Atlanta. — Reuters
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