It has been a while since investor distrust has been shaking the plans of the real estate startup WeWork. Less than a week after co-founder Adam Neumann stepped down from the post of CEO, the company has officially given up on its planned IPO on this Monday, September 30, after filing a request for withdrawal with the Securities and Exchange Commission.
The shared workspaces firm submitted financial documents for its public offer in August – back then, WeWork’s valuation was worth as much as $ 47 billion. However, investor skepticism concerning the company’s profitability led to a potential valuation of only $ 10 billion.
Increasing concern with the company’s rising losses and growing doubts about Neumann’s management, not only made the company decide to postpone its public offering – previously scheduled for September – but has also grabbed the attention of its largest investor: Softbank.
Since the Japanese group was expecting to profit on the company’s stock market debut – the IPO delay announcement was not well received, and as a move to avoid more scrutiny and a plunge in the company’s shares, Neumann decided to step down as Chief Executive Officer.
“We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong,” said Neumann’s successors Artie Minson and Sebastian Gunningham, according to Forbes. Aiming at restoring investor trust for a future attempt at an IPO, WeWork’s new board is now struggling to cut expenses and raise cash from divesting assets, while selling off some of its resources.