WeWork’s new leaders shelved plans to enter the stock market Monday as they sought to repair the battered image of a company that appeared to revolutionize the office-rental industry and was poised just weeks ago to go public with a valuation of nearly $50 billion (roughly Rs. 3,53,000 crores).
The decision came less than a week after co-founder Adam Neumman stepped aside as chief executive officer. His corporate governance practices had raised conflict-of-interest questions that compounded scepticism about the money-losing company’s prospects for turning a profit.
The suspended IPO raised an immediate funding challenge for WeWork, which had counted on a successful stock offering to pursue the meteoric growth strategy that made it so attractive to private investors in the first place. The company, which began as a co-working space in Manhattan in 2010, had planned to expand in many of the 111 cities where it now operates and launch in up to 169 additional cities across the world.
Analysts have said WeWork’s outlook could improve if it raised cash and slowed its growth to conserve capital, even though that would lower its long-term value. Its revenue has more than doubled each year since 2016, mostly through its acquisition of new property leases.