WeWork bonds tumble to their lowest since IPO filing as uncertainty rattles investor nerves

adam neumann

WeWork's bonds are falling as the possibility of the company's IPO being delayed rattles investors already wary of its valuation.

The company's 7.875% notes maturing in 2025 slid to 97.75 cents on the dollar on Tuesday, the lowest point since it filed to go public in early August.Advertisement

The bonds rose to an all-time high when WeWork said in its IPO filing that it paid off a portion of the notes and was planning to raise an additional $6 billion in debt funding, according to Bloomberg. The company issued $702 million worth of high-yield debt in April 2018, with about $669 million still outstanding as of its IPO filing.

WeWork's strategy of selling junk bonds to fund growth follows in the footsteps of other cash burning firms like Netflix and Uber.

The news also follows a report from Bloomberg that said WeWork might be considering raising more money through another sale of junk bonds. Rumors began to circulate earlier this week that WeWork might also attempt to lower its valuation or delay its IPO all together.

The company was last valued at $47 billion during a private fundraising round, and it could seek a new valuation below $20 billion, according to a report from the Wall Street Journal.

WeWork's valuation has come under intense scrutiny since it released its official IPO filing in early August. Investors and analysts have questioned the office leasing company's business model, and whether or not it can achieve sustainable profitability. Read more: $2.9 trillion State Street is sounding the alarm on years of lower market returns. Its deputy investment chief identified where the strongest income could be found in this new world order.Advertisement