It has been a testing time for WeWork of late, ever since the company announced plans of an IPO a couple of months ago. This prompted several probes into the inner workings of the company, revealing a few areas for concern, and ultimately leading the firm to put all IPO plans on hold.
Since then it appears as if WeWork is looking to streamline elements of its operation, and the most recent development could see Japanese organisation SoftBank take control of WeWork.
This according to sources at CNBC noting that both parties are in very advanced talks. More specifically it is believed that SoftBank is willing to invest roughly $4 billion – $5 billion on new funding and existing shares. Should this deal go through, it would mean that SoftBank would control an estimated 70 percent of WeWork, bringing the valuation of the company to the $7.5 billion – $8 billion mark.
This is a very sharp decline from the co-working space company’s highest valuation, which previously sat at the $47 billion mark.
While the move makes a lot of sense for WeWork if it is to get its house in order, it still remains to be sen what will happen to the company’s plans for expansion.
To date the company has spent massive amounts of money moving into new territories, including South Africa earlier this year, so it is unclear if projects in those regions will continue as planned.
Added to this is the wide number of employees across the globe that WeWork has, with them now running the risk of being retrenched as the firm streamlines its outfit.
For now WeWork has stayed relatively mum on the subject, but experts expect an announcement of the SoftBank deal to be announced in the coming days. From there it will be interesting to see how or indeed if a SoftBank-controlled WeWork would differ in terms of its operations.[Image – Photo by Eloise Ambursley on Unsplash]