WeWork bonds tumble to their lowest since IPO filing as uncertainty rattles investor nerves
- WeWork's bonds are sinking as investors are growing more concerned the company might slash its valuation or delay its initial public offering.
- WeWork's 7.875% notes maturing in 2025 slipped to 97.75 cents on the dollar on Tuesday, the lowest level since the company filed to go public in early August.
- The drop comes as the company's valuation has been under scrutiny from analysts and investors in recent weeks.
- Here's a roundup of Business Insider's WeWork coverage.
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.
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.