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Startup WeWork again in spotlight

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Startup WeWork  again in spotlight
October 08
09:00 2019

We have been writing about the startup WeWork, which was forced to postpone the initial public offering. They earn by renting commercial space for a long time in order to reconstruct it and then lease commercial accommodation to freelancers. It was mid-August when WeWork executives sent a request to hold an IPO for the first time. But large investors doubted the success of such a business model, as well as adequacy of the startup director and a correct valuation of the company. They all became the reasons for the withdrawal of the application for the IPO in mid-September.

At the end of September, WeWork’s CEO Adam Neumann quitted. After that the WeWork project continued to prepare for the public offering.

The authoritative publication The Wall Street Journal has published material giving facts which can finally undermine the confidence of potential investors. It became known that the data on the number and cost of built workplaces had been distorted. Moreover, some important managerial issues were not published too. Analysts agreed that the procedure for preparing the startup for an IPO had been conducted rather carelessly. There were a lot of discrepancies and disjunctions in the reporting documentation. All this chaos surprises experts because regulators study the activity of the companies before the IPO with special care.

Will WeWork get over challenges in order to hold the IPO? Investors believe that the chances are not so great.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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