Fast-growing startup WeWork claims to be revolutionizing the market for office space but it delayed its share offering after a cool reception to its hefty valuation
Fast-growing startup WeWork claims to be revolutionizing the market for office space but it delayed its share offering after a cool reception to its hefty valuation GETTY IMAGES NORTH AMERICA / SCOTT OLSON

Coworking space company WeWork announced Monday that it will push back its initial public offering, a week after the company replaced CEO and founder Adam Neumann with two co-chief executive officers, Artie Minson and Sebastian Gunningham.

"We have decided to postpone our IPO to focus on our own business, the fundamentals of which remain strong," Minson and Gunningham said in a statement. "We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future."

The postponed IPO means that the cash-burning company will need to find alternative sources of funding, as a $6 billion loan deal made with banks last month would only be given if the company sold $3 billion in shares.

WeWork has faced numerous controversies surrounding former CEO Adam Neumann and its financial losses as it planned to go public.

Neumann had made a number of strange moves as CEO, such as having WeWork pay him $5.9 million in stock for the "we" trademark, which he was forced to pay back, and banning meat at WeWork corporate offices.

The company also is criticized for its rough financial situation under Neumann's leadership, with its IPO prospectus revealing that the company lost $1.9 billion last year and $904 million in the first six months of 2019. The company's valuation had dipped from $47 billion to as low as $15 billion amid investor concerns over the firm's balance sheet.

Neumann stepped down last week as the company's largest investor, Japanese multinational conglomerate Softbank, had pushed for his ouster.

The new Co-CEOs Gunningham and Minson are looking to sell some of WeWork's assets such as a G650ER Jet purchased under Neumann. The company is also looking at cutting thousands of jobs in order to stop bleeding cash.

Harvard Business School lecturer Nori Gerardo Lietz has criticized the company, saying that WeWork's leadership is "not managing their growth – they're spending money like drunken sailors."

WeWork is the largest office tenant in New York and London, and has office services in 77 cities across 23 countries worldwide. The company was founded in 2010 in New York.

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