Office sharing company WeWork’s race for emergency funding is starting to resemble a high-wire act.
JPMorgan’s pitch to help WeWork score roughly $5 billion to keep it afloat is contingent on whether it can convince other large investors like hedge funds to put up the dough, a source close to the situation said. The bank won’t know if it’s succeeded for at least another week, this person added.
Japanese investment firm Softbank, run by boss Masayoshi Son, meanwhile, is waiting in the wings with a bailout package that would give it control of WeWork, according to the Wall Street Journal.
WeWork’s investors want to wait for Jamie Dimon’s JPMorgan Chase, however, because they think it will offer a package that will dilute the company’s stock less than the SoftBank, which would reportedly value WeWork at roughly $10 billion, according to two sources familiar with the talks.
The office rental company has been thrown into disarray after pulling a planned public stock offering last month — and ousting co-founder Adam Neumann as CEO — after demand for the stock proved weak. Without the IPO, the company risks running out of money by year end. The company was valued at as much $47 billion in a fundraising round last January — only to see its value drop to under $20 billion in the now-squashed IPO.
Last week, the company saw its value drop even further when a WeWork investor put out a request to sell a roughly $60 million stake in the business at an $11.5 billion valuation, a source close to that sale told The Post.
WeWork and JPMorgan declined to comment.
Adding to its woes, WeWork has closed about 2,300 phone booths at some of its 223 sites after it discovered elevated levels of formaldehyde, Bloomberg reported.
After a tenant complained of odor and eye irritation, WeWork began testing and the results led it to remove 1,600 phone booths. An additional 700 booths were closed. All the phone booths closed were installed over the past several months, Bloomberg said.
“Long-term exposure to formaldehyde, such as that experienced by workers in jobs who experience high concentrations over many years, has been associated with certain types of cancers,” WeWork told tenants .
One tenant told Bloomberg she was worried about cancer as she had spent many hours inside affected phone booths at a San Francisco WeWork.