- WeWork recently made an embarrassing statement about the NYSE threatening to delist its stock.
- Besides Softbank, some VCs still had big stakes, such as Benchmark and Insight Partners.
- If there are lessons to be learned from WeWork, there is no indication that VC has learned them.
WeWork was forced to publish last week embarrassing press release The stock has been trading below $1 for so long that it has warned it is in danger of being delisted from the NYSE.
In 2019, WeWork’s valuation reached $47 billion, a disastrous IPO attempt that resulted in the exodus of flamboyant and controversial founder Adam Neumann. As of Monday, the stock traded at 47 cents, with a market capitalization of his $345.7 million, and the company has lost about $46.7 billion in value over his four years, making him a windswept sand sculpture. disappearing like
In 2021, there was a moment when the company’s fortunes seemed to turn around. It was acquired by BowX, the special-purpose acquisition firm of his SPAC, Blank Check, of Vivek Ranadivé, the founder of software company Tibco, but perhaps better known as the owner of the Golden State Warriors and most recently the Sacramento Kings. I’m here. At the time, he was valued at WeWork at $9 billion. CNBC reported.
But WeWork has yet to find a foothold or a future as it enters post-pandemic 2023 and is heavily indebted. Last month, it signed a deal to restructure its debt, reducing its debt by about $1.5 billion and extending the maturity of other bills to preserve cash. As reported by Reuters. after this 40 locations to close in late 2022.
Who would be hurt if a $47 billion startup shrank so dramatically? Investors. In this case, SoftBank is by far the most affected. The It’s Vision Fund still makes him WeWork’s largest shareholder, holding more than 461.5 million shares, or about 62% of the company. SoftBank has been in a world of hurt over WeWork and other missteps for years.
Other venture capitalists still hold the bag, with sizable stakes in WeWork, including Benchmark (still holding more than 20 million shares, or nearly 3% of the company) and Insight Partners (just under 13 million shares, or just under 2%). I own ), according to recent regulatory filings. Then there’s founder Adam Neumann, who owns over 68 million shares of common stock and nearly 20 million (almost all) of his Class C shares.
WeWork has put a little egg in the face of Benchmark and Insight, but that’s ultimately just a spec amidst enviable performance year after year. standard had big stakes Amazon’s acquisition of One Medical for $3.9 billion was one of the few flashy acquisitions of last year. Insight is also known for investing in winners like Databricks and SentinelOne. Benchmark, Insight and Softbank did not immediately respond to requests for comment on Monday.
It’s true that Neumann’s WeWork holding is in dire straits right now, but he’s already been bought back in Silicon Valley style. He returned in August 2022 with a new startup that raised his $350 million from VC giant Andreessen Horowitz. tech speaker circuit. A WeWork spokeswoman declined to comment. sharp On its final earnings for the fourth quarter of 2022, the company announced an 18% year-over-year increase in quarterly earnings.
Amazingly, it may seem like blowing nearly $47 billion, but with such an impact, WeWork is no alarm to most of the venture capital community. It’s just stretching and yawning.