The We Company, parent company of the short-term real estate property management and development company WeWork and other We-related subsidiaries, is reportedly shelving its plans for an initial public offering.
The company’s plans for a public offering have been hampered by questions about its corporate governance and the ultimate value of a company that private investors once thought was worth nearly $50 billion.
Public investors were 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 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.
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.
Even these steps were not enough to comfort Wall Street investors, apparently. 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 that The We Company is likely to pull its public offering… and with Uber and Lyft underperforming in their first year as public companies, perhaps venture capital firms will rethink the sky-high valuations they’d placed on their portfolio companies. Perhaps it’s time to relearn the lesson that greed may not actually be good.
We have reached out to The We Company for comment and will update with their response.
