Coworking startup WeWork delays going public
After widespread reports that the coworking startup WeWork was going to go public imminently, the company announced in a statement that it was delaying its initial public offering until some time by the end of 2019.
“The We Company is looking forward to our upcoming IPO, which we expect to be completed by the end of the year," WeWork's parent company, the We Company, said in a statement. "We want to thank all of our employees, members and partners for their ongoing commitment.”
They declined to comment further.
The company, founded in New York City in 2010, intersects technology, to a degree, and real estate by providing freelancers, startups and more with rentable office space they can access through an app and site. It currently boasts 834 "open and coming soon" locations, according to its website, spread out across 125 cities.
While trendy and offering amenities such as stocked kitchens, pet-friendly locations and "art-infused buildings," some critics have questioned the company's actual value should they go public.
As a private company, it was recently valued at around $47 billion, according to the Associated Press.
Entrepreneur and 2020 presidential candidate Andrew Yang tweeted that this "valuation is utterly ridiculous."
Rep. Alexandria Ocasio-Cortez, D-NY, cited WeWork's transition to the public market as an example of a potential risk for everyday investors at a hearing last week of the U.S. House Committee on Financial Services’ Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets.
"Some of these private markets that we hear the most about on the news tend to be these early stage tech companies, these unicorns ... like your Snapchats, your pre-IPO Twitter, and there is this idea that you can really get rich if you get in on the ground at these early companies before they get to the public market," Ocasio-Cortez said, noting that these private companies don't have to disclose financial information to investors the way publicly-traded companies would.
"For every one Uber, for every one big company, which still can be risky, I'm sure there's tons of other companies that can take on lot of investment, fail, without any of that disclosure," she said.
"To kind of illustrate this point we recently saw just last week an issue with WeWork, where WeWork was making this transition from the private markets, trying to get ready for an IPO to the public market and they had raised on a previous valuation of $47 billion, and now they just decided overnight, 'Just kidding, we're worth $20 billion,'" she said, citing media reports speculating WeWork's IPO value. "So, if you invested in WeWork thinking that it had a valuation of $47 billion, you're getting fleeced."
