Sep 6, 2019

Behind new buzz over WeWork's IPO

Photo: Jonathan Brady/PA Images/Getty Images

There is lots of WeWork IPO buzz after the WSJ reported that the company may go public at a valuation at less than half its most recent private mark of $47 billion.

Driving the news: It also revealed that CEO Adam Neumann recently met in Tokyo with SoftBank CEO Masayoshi Son to discuss either a cornerstone IPO investment or a private capital infusion that would allow WeWork to delay its IPO until next year.

Yes, but don't bet on the delay. WeWork needs to go public in 2019 in order to receive a $6 billion credit facility, and multiple sources tell me that Neumann is willing to accept a major equity valuation slash.

    • Caveat: If Masa pulls up the Brink's truck — perhaps offering to supplant the proposed IPO proceeds and debt proceeds — then WeWork's calculus changes significantly. Particularly given that it's done early employee tenders already.

The big picture: On the valuation, it's important to remember that WeWork was valued at only $21 billion when it raised its Series G funding in mid-2017. That was the round led by SoftBank Vision Fund.

  • The bump to $47 billion came later from SoftBank Group (not from its Vision Fund), via a convoluted/downsized process in which the Japanese giant seemed to pay up for taking up so much of WeWork's time.
  • And, yes, there are some market sources who believe the $47 billion was, in at least a small part, to help boost fundraising for Vision Fund II.

What to watch: We still don't know when the IPO road-show kicks off. But, when it does, all eyes will be on Neumann. Those close to the process believe that there is lots of buy-side interest in the company, but more than a few outstanding questions about its leader. His performance in those hotel ballrooms could be worth billions.

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The battle over WeWork's IPO

Illustration: Sarah Grillo/Axios

WeWork is moving forward with its IPO, as this space has repeatedly predicted, despite recent reports that major investor SoftBank was pushing for a delay.

Between the lines: It's unclear if SoftBank leaked word of its own resistance. But lots of people think SoftBank was the source, which might as well be the same thing in terms of future perception among founders and venture capitalists.

Go deeperArrowSep 11, 2019

Latest WeWork drama: SoftBank vs. CEO Adam Neumann

Illustration: Aïda Amer/Axios

The WeWork soap opera had been scheduled to take a short hiatus, at least until Q3 numbers could be compiled, but then the company surprised everyone with a pop-up episode over the weekend.

What's happening: The WSJ reported yesterday that "a bloc of WeWork directors is planning to push Adam Neumann to step down as chief executive." CNBC added that SoftBank's Masayoshi Son supports the move.

Go deeperArrowSep 23, 2019

WeWork picks up the pieces after ousting its CEO

Illustration: Sarah Grillo/Axios

When someone makes the inevitable WeWork movie, consider it a remake of the end of Quentin Tarantino's 1992 film Reservoir Dogs. Almost all of the major characters die. The exception is Mr. Pink, who seems to escape, but then we hear police sirens and his fate is left ambiguous.

Driving the news: Founder and CEO Adam Neumann was fired on Tuesday in a boardroom coup that he enabled by recently changing governance terms.

Go deeperArrowSep 25, 2019