We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Financial Statement Analysis and Valuation Dilemma of WeWork (The We Company).
- Authors
Satish, D.
- Abstract
WeWork, the New York-based start-up that revolutionized commercial real estate by offering flexible shared workspaces, attracted massive investments from the likes of SoftBank, Goldman Sachs, JP Morgan Chase & Company, and many other top private equity players. WeWork's valuation soared to more than $47 bn in January 2019. But its mandatory filing of S-1 papers on August 14, 2019 with the Securities and Exchange Commission (SEC) to go public left investors unconvinced, as they felt that the company did not deserve such a high valuation. WeWork's complex corporate structure, questionable corporate governance and business practices, and less than anticipated financial projections drove away potential investors. Adam Neumann (Neumann), WeWork's CEO, found himself in the middle of the controversy with some analysts questioning the transactions between him and WeWork. The controversy led to a failed Initial Public Offering (IPO) and to Neumann exiting WeWork. The case study captures the growth story of WeWork and its valuation journey through a series of findings. It delves deeper into the issues of complex corporate structures, a non-transparent corporate culture, questionable related party transactions, and iconic entrepreneurs and valuations which might not match the fundamentals. The case also gives an opportunity to students to analyze the Space-as-a-Service (SPaaS) industry, work out the relative valuation of WeWork with a close industry peer, and analyze the financial statements of WeWork.
- Subjects
SOFTBANK Group Corp.; J.P. Morgan Chase &; Co.; CORPORATE finance; CONTENT analysis; GOLDMAN Sachs Asset Management (Company); GOING public (Securities); VALUATION; RELATED party transactions; SHARED workspaces; FINANCIAL statements; STUDENT housing
- Publication
IUP Journal of Accounting Research & Audit Practices, 2021, Vol 20, Issue 4, p496
- ISSN
0972-690X
- Publication type
Article