WeWork’s parent The We Company said on Monday it will file to withdraw its initial public offering, a week after the SoftBank-backed office-sharing startup removed founder Adam Neumann as its chief executive officer.
WeWork’s decision to pull its IPO was widely expected after the company postponed the share sale earlier in September, following push-back from perspective stock market investors over its widening losses and Neumann’s unusually firm grip on the company.
“We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong,” WeWork’s newly appointed co-CEOs Artie Minson and Sebastian Gunningham said on Monday.
“We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future,” Minson and Gunningham added.
SoftBank, which owns nearly a third of We Company, invested in the startup at a $47 billion valuation in January. But investor skepticism led to it earlier this month considering a potential IPO valuation of as low as $10 billion, Reuters reported.
We Company had vowed to pursue the IPO and complete the share sale by the end of the year after Neumann stepped down as CEO. However, sources had told Reuters last week that the IPO was unlikely to be completed this year.
WeWork’s doomed IPO marks a rough period for startups that have been going public in recent weeks. Last week, Endeavor Group pulled its IPO, while shares of Peloton Interactive Inc, the fitness startup known for on-demand workout programs on its exercise bikes, slid as much as 7% in their market debut.
Earlier in September, teeth alignment firm SmileDirectClub Inc opened to an underwhelming debut.
Ride-hailing companies Uber Technologies Inc and Lyft Inc also went public earlier this year with high expectations, but their shares have tumbled since then after investor concerns over their steep losses.
Reporting by Anirban Sen; Editing by Shounak Dasgupta and Nick Zieminski