INSUBCONTINENT EXCLUSIVE:
The We Company, beleaguered parent of the short-term real estate property management and development company WeWork and other We-related
subsidiaries, has issued a statement that says it “expects” to complete its initial public offering by the end of the year
The note all but confirms that the company is indeed delaying its IPO roadshow, which had been expected to commence this week.“The We
Company is looking forward to our upcoming IPO, which we expect to be completed by the end of the year,” the statement notes
“We want to thank all of our employees, members and partners for their ongoing commitment.”We’s plans for a $20 billion public
offering have been hampered by questions about its corporate governance and the ultimate value of a company that private investors, through
multiple rounds of funding, once thought was worth nearly $50 billion.But under the scrutinizing spotlight of the IPO process, investors
have been publicly and privately balking at that sky-high valuation and the company’s questionable governance practices under chief
executive officer and co-founder, Adam Neumann, according to The Wall Street Journal, which first reported the news that The We Company
would put its offering on hold. Over the past few weeks, The We Company — which has expanded to include a boutique hotel operation,
members-only financial services and a charter yacht service (!) — has made several moves to allay investors’ concerns
The company unwound some particularly egregious transactions with Neumann and added new directors
It also moved to limit Neumann’s power at the company.And last week, the company amended its prospectus to include the appointment of an
independent lead director
It also slashed the strength of Class B and Class C shares so Neumann would not have 20 times the voting power of other shareholders, and
removed Neumann’s wife from succession planning at the company
And then SoftBank, to shore up the IPO value, reportedly was prepared to buy at least $750 million in additional shares in the process.But
eve all these drastic steps were not enough to comfort Wall Street investors
Not even the attempts to slash the company’s valuation to below $10 billion could attract enough investor interest to the public offering
And the opacity of The We Company’s reporting and metrics likely did nothing to help matters in the eyes of the investing public.Now, with
the We Company delaying its listing, and with Uber and Lyft solidly underperforming in their first year as public companies, we may finally
be reaching a long-awaited moment of reckoning.After years of rapid value growth in the tech world, spurred in part by venture capital
firms placing sky-high valuations on their portfolio companies as ever-more cash was piled into them, perhaps the tsunami has finally hit
If so, it’s not going to be pretty and there may be more to come
Perhaps it’s time to relearn the lesson that greed may not actually be good.
