Editor’s note: This article comes from “Tencent Technology”, review: Le Xue, 36 氪 authorized release.According to foreign media reports, WeWork, the pioneer of shared office space, is still actively promoting the $20 billion IPO stock offering plan, although the company’s largest private investor, Softbank, urged it to postpone the plan.In recent weeks, there has been growing concern about WeWork’s huge operating losses, expensive lease agreements and executive spending.But the company is still planning to start its investor roadshow and will start selling itself to investors next week.The pressure to suspend the issuance plan began last month after the company issued a prospectus showing that the company had lost about $3 billion in the past three years.The company’s current name is We.According to reports, Softbank, which has invested more than $10 billion in WeWork, has been frightened by the company’s sharp decline in valuations, and Softbank’s bankers have begun to discuss suspending their IPOs.WeWork’s IPO underwriters JPMorgan Chase and Goldman Sachs are testing the appetite for a valuation of $15 billion to $20 billion – a significant drop from the $47 billion valuation of Softbank earlier this year.Dan Ives, an analyst at Wedbush Securities, said investors were hesitant to show that their willingness to support unprofitable technology companies was “disagreement.”He said the concern is also reflected in the lower-than-expected investor demand for the taxi service companies Uber and Lyft, which have fallen in value since listing.“This is a question of profitability and business model,” Ives said. “Mathematics is not lying. Investors say these valuations are high enough. We see investors becoming more sensitive to valuations, which are not profitable.The ability of the company has had an impact,” Rohit Kulkarni of MKM Partners Research said in a report last month that it is investing in view of its growing losses and its ambitious expansion plans.The “will have to take a big step in confidence to believe that WeWork will show signs of a sustainable economic development model”.WeWork reported that as of June 30, it had 527,000 users, an increase of more than 90% from the previous year.WeWork currently has 528 stores, which is higher than the 485 at the end of the first quarter of 2019.It also said it plans to open 169 new stores.But WeWork faces more and more complex issues, especially in terms of management.Adam Neumann, CEO and co-founder of WeWork, was able to cash out more than $700 million from the company by selling shares and borrowing before the company’s IPO, which is unusual for a founder.He also owns WeWork rental properties, which have potential conflicts of interest.Neumann is also keen to extend WeWork beyond the rental of office buildings.According to a recent blog post by Neumann, the company’s new “guidance mission will be to raise the awareness of the world.”He goes on to say that this means “being a student of life and accepting the view that we are always growing and are always in the process of self-discovery, self-growth and change”.Neumann also said that WeWork will reshape the brand and continue to expand, and he believes that WeWork is a “global platform” such as “space as a service”.There is no woman in the company’s seven-person board.For investors who have noticed this, investing in the company means having confidence in Neumann.Under the complex shareholding structure, Neumann controls most of the voting rights through the company’s B shares and C shares.According to the IPO, Neumann’s shareholding may increase, and WeWork leased office space including four buildings that he partially owned.Since the founding of WeWork nine years ago, Neumann has spent more than $80 million on the purchase of at least five homes and shares in commercial real estate and start-ups, including a medical cannabis company.Corporate governance expert Charles Elson said that WeWork’s valuation problems and its prospects of being forced to shelve an IPO can be directly attributed to the issue of dual equity structure.When a company adopts a dual-equity structure, investors can hardly influence the decision-making of the company, which means that the company’s management can freely make any decisions without being bound by the opinions of investors.“Ordinary shareholders have essentially no power – all power is concentrated on the founders.” John L. Weinberg Center For Corporate Governance, University of DelawareEdgar S Woolard Jr, chairman of governance, said, “Considering the potential conflicts of interest that WeWork has had over the years, coupled with a dual shareholding structure, people will naturally worry about this.There will be problems.”.
WeWork disregards Softbank’s opposition to continue to advance the IPO program