Softbank urges WeWork to shelve IPO over valuation worries:The Asahi Shimbun

Cornelia Mascio
Сентября 11, 2019

SoftBank and its Saudi-backed Imaginative and prescient Fund have invested greater than $10 billion in WeWork.

Other sources stressed the situation was still in flux.

The sources requested anonymity because the matter is private. SoftBank declined to comment. However, much of the company's business has come into sharp focus ahead of its roadshow and many analysts have been quite critical of its numbers.

The large investor in the SoftBank company would also have influence behind the scenes to move the IPO.

SoftBank Group Corp. and its affiliates hold about 29 per cent of WeWork stock, Bloomberg reported last week.

Son and long-time lieutenant and group Vice Chairman Ron Fisher were in favor of the IPO until last week, even as others inside the group were pushing for a delay, one source said.

The reduction in WeWork's valuation is the latest disappointing news from the multibillion-dollar tech "unicorns" seeking to tap into Wall Street for fresh financing.

WeWork planned to raise $3 billion to $4 billion by going public and secure another $6 billion in debt contingent on its IPO raising at least $3 billion, The Journal said.

Given its need for cash, a postponement of the IPO would be feasible if SoftBank would inject more cash into WeWork, a proposition Son has so far been reluctant to pursue given how much the fund has already put in, according to two sources.

The Financial Times reported on SoftBank's position earlier on Monday (Sept 9).

It is the second time in three days that the company has cut its valuation target, after sources said on Thursday last week that its parent, The We Co, was revising it down from US$47 billion to US$20 billion over doubts about its prospects from potential investors.

At the end of June the fund recorded the value of $71 billion in investments in 83 startups as having grown by $20 billion.

The tech conglomerate has burned through much of the $100 billion raised by its first Vision Fund in just two years, recording big paper gains on internal revaluations of its tech investments.

A lower valuation would be a blow to SoftBank, forcing it to write-down its investment. The Financial Times said SoftBank was anxious that a low price would affect its other fundraising projects.

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