WeWork Pull IPO Filing, Investors Wary
The parent company of WeWork – whose serviced offices are used by many international consumer electronics brands in Australia – has withdrawn its IPO filling, signalling increasing investor hesitation.
According to The New York Times, the company sought to sell shares and raise as much as US$4 billion, with a $6 billion bank loan contingent on the IPO.
Without the capital injection, commentators expect WeWork to significantly halt its expansion plans, with some speculating it could run out of cash by mid-next year.
Co-Founder, Adam Neumann, resigned as CEO last week, amid capital raising difficulties and investor concern over corporate governance.
Existing bank lenders are reportedly requiring WeWork to raise new capital before issuing new loans, with concerns over cash flow.
In the first half of this year WeWork notched an operating loss of US$1.37 billion.
“We have decided to postpone our I.P.O. to focus on our core business, the fundamentals of which remain strong,” claims We Company Co-Chief Executive, Artie Minson, in a statement.