WeWork's valuation could reportedly slip below $8 billion as part of SoftBank's proposed bailout of the embattled company
- SoftBank is reportedly eyeing a plan to rescue WeWork from its precarious financial situation that would value the company below $8 billion, according to a new report from Bloomberg.
- The embattled office-sharing company is weighing competing bailout plans from SoftBank and JPMorgan in order to avoid running out of cash, which could reportedly happen as soon as next month.
- A sub-$8 billion valuation from SoftBank would be a steep dropoff from the $47 billion the Japanese investment group privately valued WeWork at in January.
- WeWork executives have been cutting jobs, selling off some of the company's holdings, and slashing side projects like WeGrow in the aftermath of its failed IPO attempt.
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WeWork's financial woes could lead its valuation to slip below $8 billion, Bloomberg's Gillian Tan, Sonali Basak, Michelle Davis, and Saritha Rai reported on Friday.
SoftBank is mulling the possible valuation as part of a proposed WeWork bailout, according to the report. A WeWork spokesperson reached by Business Insider declined to comment.
The embattled office-rental company has been reeling since its failed attempt at a public offering last month, which was scrapped after the company's financials and leadership came under harsh scrutiny from investors and the public. Co-founder Adam Neumann resigned as CEO last month, and WeWork's new CEOs are reportedly planning to cut thousands of jobs, among other cost-cutting measures.
A valuation of less than $8 billion would represent a stark dropoff from SoftBank's recent $47 billion private valuation of WeWork in January. SoftBank has now calculated that WeWork needs at least $3 billion to operate through the next year, and could run out of cash next month without a debt offering, according to The Wall Street Journal.
The latest proposal from SoftBank is still up in the air and subject to change, people with knowledge of the discussions told Bloomberg. The Japanese company, already WeWork's largest investor, is reportedly sharing its proposal with about 100 investors in order to shore up support for the debt offering.
WeWork is also considering a competing bailout plan from JPMorgan. A source told Business Insider that a debt package from the bank could be in the billions.