NEW YORK — WeWork’s parent company put its stock market debut on the backburner Tuesday, struggling to drum up investor enthusiasm for a fast-growing enterprise that spread trendy communal office spaces across the globe while piling up massive losses.
The We Company dropped plans to begin a road show this week to market its shares for an initial public offering that had been widely expected this month. The company said it still plans to launch its IPO by the end of the year.
“The We Company is looking forward to our upcoming IPO, which we expect to be completed by the end of the year,” the company said in a brief statement. “We want to thank all of our employees, members and partners for their ongoing commitment.”
Already, the We Company had announced sweeping corporate governance changes intended to address conflict of interest and commitment concerns surrounding CEO Adam Neumann. And it had been considering pricing its shares in the IPO at a valuation of less than half the estimated $47 billion that private investors have assigned to it.
The delay was striking in a year marked by healthy investor appetite for IPOs. WeWork had filed confidentially for an IPO in December of 2018 and gave investors a detailed look at its finances in a public regulatory filing last month. Last week, it announced plans to list its shares on the Nasdaq.
“It’s a big deal,” said Kathleen Smith, principal at Renaissance Capital, a provider of institutional research and IPO exchange-traded funds. “If the market for IPOs were really bad, then maybe it wouldn’t be, but the IPO market is in fairly good health.”
However, Smith said investors in public markets have gotten more cautious about big companies that are growing quickly but also bleeding losses. The ride-hailing companies Uber and Lyft came to the market earlier this year with large losses, for example, and both are still trading well below their IPO prices.
Only a couple weeks ago, Smith was forecasting this year could be the biggest for IPO proceeds since 2014. WeWork’s delay may curtail the total, but Smith said demand is still healthy for IPOs of companies that are profitable or at least show a realistic path toward it.
