WeWork is formally withdrawing the prospectus for its scrapped initial public offering, capping a botched effort to go public that cost its top executive his job.<\/p>\n
\u201cThis puts an official pause on our process of becoming a public company,\u201d Artie Minson and Sebastian Gunningham, who took over last week as co-chief executive officers of WeWork parent We Co, said in a note to staff Monday. \u201cRest assured, WeWork will become a public company, but we can only IPO once and we want to do it right.\u201d<\/p>\n
The withdrawal ends a turbulent process that turned one of the most hotly anticipated IPOs into a cautionary tale of the public market\u2019s reticence to pay up for a business model that\u2019s unproven. Co-founder Adam Neumann stepped down as chief executive officer last week after concerns about corporate governance and the money-losing startup\u2019s aggressive growth.<\/p>\n
\u201cWhile this may feel disappointing, the leadership team and our board have decided to take a step back to assess where we are as a company,\u201d the co-CEOs said in the internal note Monday.<\/p>\n
\u201cThese past few months have not been easy, but our team has been incredibly resilient. We are now focused on improving our core business – balancing expansion with a focus on profitability.\u201d<\/p>\n
WeWork will likely postpone the offering until next year, Bloomberg reported last week. The delay sidelines what was expected to have been the second-biggest IPO in the US this year and also threatens a $6 billion credit financing that was contingent on a successful offering.<\/p>\n
The credit facility will be unwound if the IPO doesn\u2019t happen this year, a person with knowledge of the matter said.<\/p>\n
The company is in talks with investment banks about a new $3 billion loan, which would also be contingent on raising a substantial amount of new equity, people familiar with the matter told Bloomberg Tuesday. A likely source of that equity infusion is SoftBank Group Corp., the company\u2019s largest shareholder, they said.<\/p>\n