Investor SoftBank urges WeWork to ditch plans for its blockbuster float

OFFICE space provider WeWork is considering canning its blockbuster float after mounting pressure from its biggest shareholder over concerns about its business model, it emerged today.

Japan’s SoftBank — which has a 29% stake — is said to be unhappy with WeWork’s complicated corporate structure and governance.

SoftBank has urged that WeWork shelve its initial public offering — expected to be the biggest in the world this year — and postpone its investor roadshow, Bloomberg reported.

WeWork is aiming to raise between $3 billion and $4 billion and is testing appetite for an IPO valuation of between $15 billion and $20 billion. But that is far below the $47 billion valuation given to WeWork when SoftBank invested $2 billion earlier this year.

Investor concerns were first raised last month when the company filed a prospectus revealing that it had racked up billions in losses and was burning through cash.

Investors are also sceptical of the business model, which has not yet been tested in tough economic times.

The main concern is that the leases are too long — an average of 15 years — and that the start-ups which often take the space will be forced to renege on it.

SoftBank and WeWork declined to comment.