SoftBank pushes WeWork to postpone its contentious IPO

WeWork reportedly might slash its valuation below $20 billion, or even postpone its IPO

Some investors are also anxious about skepticism surrounding the company's business model and want its planned initial public offering (IPO) to be pushed to next year, sources said on condition of anonymity.

Son and SoftBank have been pushing We Company Chief Executive Adam Neumann to delay the IPO but have so far failed to persuade him, according to two sources familiar with the matter. Last Wednesday, Rennaisance Capital co-founder and chairwoman Kathleen Smith told CNBC that the poor IPO performances of Uber and Lyft-especially given the similar unprofitable natures of their business models-could reflect directly on the We Company's public debut.

WeWork's proposed valuation cut comes shortly after the shared office-space provider announced it was planning an IPO at around $20 billion, which is significantly lower than the $47 billion private valuation the company secured earlier.

We Company's planned listing follows weak initial trading at other startups including Uber Technologies Inc and Slack Technologies Inc, both backed by SoftBank.

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.

Adding to the importance of We Company going public is the $6 billion in bank commitments it secured in August which is dependent on it raising at least $3 billion from the IPO or direct investors like Softbank.

SoftBank "have got an important voice, but more importantly they have money".

Investors doubt WeWork's ability to make money fast enough and also wonder if the company is solid enough to withstand a slowdown in the global economy, sources said.

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

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 as well as the sale of marquee investments including India's Amazon Inc rival Flipkart. The Financial Times said SoftBank was anxious that a low price would affect its other fundraising projects.

SoftBank group, the largest shareholder of WeWork, is preparing itself to deal with a potential loss, a reminder of an investing strategy that inflated startup valuations across Silicon Valley.

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