WeWork withdraws its IPO filing after weeks of corporate drama

PHOTO: In this July 19, 2019, file photo, a WeWork office is shown in New York.PlayTimothy A. Clary/AFP/Getty Images, FILE
WATCH News headlines today: Oct. 16, 2019

After weeks of corporate drama, WeWork announced Monday that it will file a request to withdraw its initial public offering filing.

The move to withdraw their IPO form, which was initially filed with the Securities and Exchange Commission in August, comes a little less than a week after it was announced that the company's co-founder Adam Neumann was stepping down as CEO, and two weeks after the company announced they were delaying their IPO.

"We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong. We are as committed as ever to serving our members, enterprise customers, landlord partners, employees and shareholders," the company's newly-appointed co-CEOs, Artie Minson and Sebastian Gunningham, said in a joint statement on Monday.

PHOTO: In this July 19, 2019, file photo, a WeWork office is shown in New York. Timothy A. Clary/AFP/Getty Images, FILE
In this July 19, 2019, file photo, a WeWork office is shown in New York.

"We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future," the statement added.

Neumann stepped down as CEO after reportedly facing immense pressure from board members. It was announced, however, that he will stay on in a non-executive role as chairman of the board.

WeWork was founded by Neumann in New York City in 2010 and provides freelancers, startups and others with rentable office space they can access through an app and site. It boasts 834 locations, currently open or upcoming, spread out across 125 cities, according to its website.

While trendy and offering amenities such as stocked kitchens, pet-friendly locations and "art-infused buildings," some critics have questioned the company's actual value as it works to go public.

As a private company, WeWork was recently valued by private investors at around $47 billion, according to The Associated Press. That figure has come under scrutiny from many investors and even lawmakers.

At a hearing earlier this month of the U.S. House Committee on Financial Services’ Subcommittee on Investor Protection, Rep. Alexandria Ocasio-Cortez, D-N.Y., cited WeWork's transition to the public market as an example of a potential risk for everyday investors Entrepreneurship and Capital Markets.

"They just decided overnight, 'Just kidding, we're worth $20 billion,'" citing media reports speculating WeWork's IPO value, adding: "If you invested in WeWork thinking that it had a valuation of $47 billion, you're getting fleeced."

The We Company, which is the parent company of WeWork, had reportedly planned to seek a valuation between $10 billion and $12 billion, significantly lower than the $47 billion suggested by private investors, Reuters reported earlier this month.