SoftBank Has More Riding on WeWork Than Even Its Co-Founder
The public stock offering has drawn substantial scrutiny from investors, expressing concerns about WeWork’s spending.
(Bloomberg) -- SoftBank Group Corp. and its affiliates own about 29% of WeWork ahead of its initial public offering, an executive for the co-working company said in a meeting with analysts this week. The sizable stake, which hasn’t been disclosed publicly, indicates that the Japanese conglomerate’s fortunes are tied up in a big way to the performance of WeWork.
WeWork held a private meeting Wednesday to brief analysts on the business in New York, where the company is based. According to a person with direct knowledge of the matter, a WeWork executive also said in the meeting that Adam Neumann, the co-founder and chief executive officer, will eventually own about 29% as well. He currently has about 22%, which will rise to 29% over time after his stock vests, the WeWork executive said.
The public stock offering has drawn substantial scrutiny from investors, expressing concerns about WeWork’s spending and corporate governance. While the IPO prospectus includes some information about the sizes of various shareholders’ stakes, it didn’t specify percentages. The documents did say, however, that Neumann wouldn’t sell stock for at least a year after the IPO.
Representatives for SoftBank and WeWork declined to comment. The Japanese company’s shares slid 2.7% in Tokyo Friday.
The IPO won’t be quite the celebration WeWork once foresaw. The startup is considering seeking a valuation of about $20 billion to $30 billion, people with knowledge of the matter said. The range could end up closer to $20 billion, said one of the people, which would be less than half the valuation it secured from Softbank just a few months ago.
In the meeting Wednesday, WeWork told analysts it planned to start its IPO roadshow next week, confirming a Bloomberg News report. “Fingers crossed,” an executive said.
To contact the reporter on this story: Gillian Tan in New York at gtan129@bloomberg.net
To contact the editors responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net, Anne VanderMey, Mark Milian
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