UPDATE 3-WeWork throws in the towel on ill-fated IPO

WeWork's parent The We Company said on Monday it will file to withdraw its initial public offering, a week after the SoftBank-backed office-sharing startup ousted founder Adam Neumann as its chief executive officer. The withdrawal of its IPO prospectus formalizes the end of the New York-based company's pursuit of a near-term listing and allows Neumann's successors to proceed with the company's financial turnaround without disclosing as much information publicly.

It will also put pressure on WeWork to secure alternative funding, given that a $6 billion loan deal with banks agreed last month hinged on a successful share sale of at least $3 billion. According to two sources familiar with the matter, the company is currently looking to trim its workforce and to slow down its expansion in order to burn through less cash and be less dependent on fresh funding.

The company is currently in talks to raise fresh funding from investors, including SoftBank Corp, the sources added. The decision to withdraw the IPO was no surprise though. It was widely expected after the company postponed the share sale earlier in September, the following push-back from perspective stock market investors over its widening losses and Neumann's unusually firm grip on the company.

"We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong," WeWork's newly appointed co-CEOs Artie Minson and Sebastian Gunningham said on Monday. "We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future," Minson and Gunningham added.

SoftBank, which owns nearly a third of We Company, invested in the startup at a $47 billion valuation in January. But investor skepticism led to it earlier this month considering a potential IPO valuation of as low as $10 billion, Reuters reported. We Company had vowed to pursue the IPO and complete the share sale by the end of the year after Neumann stepped down as CEO. However, sources had told Reuters last week that the IPO was unlikely to be completed this year.

WeWork's doomed IPO marks a rough period for startups that have been going public in recent weeks. Last week, U.S. entertainment and talent agency company Endeavor Group Holdings pulled its IPO, while shares of Peloton Interactive Inc, the fitness startup known for on-demand workout programs on its exercise bikes, slid as much as 7% in their market debut. Earlier in September, teeth alignment firm SmileDirectClub Inc opened to an underwhelming debut.

Ride-hailing companies Uber Technologies Inc and Lyft Inc also went public earlier this year with high expectations, but their shares have tumbled since then after investor concerns over their steep losses.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)