Here's how WeWork answered the 5 biggest questions about its business - and why analysts are still worried about its upcoming IPO
- Analysts and potential investors have had some big questions about WeWork. They now have some answers.
- In its public offering paperwork that it released last week, WeWork addressed many of those questions.
- One of the sections in the document was entitled "Expected Resilience in a Downturn."
- But the company's answers didn't necessarily provide a lot of reassurance to its skeptics; many analysts instead found reasons in WeWork's IPO paperwork to be even more skeptical of the company than before.
- "Their list of risks [in the document] for the company going forward were kind of a greatest hits of what everyone has been thinking about it," according to Walter Johnston, who focuses on the real-estate market as a vice president of credit ratings at the research firm Morningstar.
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Analysts and potential investors have had some big questions about WeWork. They now have some answers.
The coworking giant has faced scrutiny over everything from its basic business model, to its valuation, to its CEO Adam Neumann. In its public offering paperwork that it released last week, it addressed many of those questions. The filing even attempted to answer one of the biggest head-on - one of the sections in the document was entitled "Expected Resilience in a Downturn."
But the company's answers didn't necessarily provide a lot of reassurance to its skeptics. Although the filing attempted to play down or paper over the weaknesses in WeWork's business model and dubiousness of its $47 billion valuation, many analysts instead found reasons in WeWork's IPO paperwork to be even more skeptical of the company than before.
Read this: Here are the 5 biggest questions facing WeWork as it prepares for its IPO
There had been plenty of "rumors and whispers" prior to the paperwork that the company was losing copious amounts of money and its growth was unsustainable, said Walter Johnston, who focuses on the real-estate market as a vice president of credit ratings at the research firm Morningstar. The filing basically confirmed those suspicions, he said.
"Their list of risks [in the document] for the company going forward were kind of a greatest hits of what everyone has been thinking about it," Johnston said.
Here's how WeWork answered some of the biggest questions about its business and offering - and what analysts made of its answers: