Earlier this year, Goldman Sachs Group participated in a bid for WeWork listing services, and Goldman Sachs Group did not hesitate to give a valuation of $65 billion in order to win the bid. At that time, the market expected WeWork to be the second largest IPO unicorn in US stocks this year.

In just a few months, however, WeWork has gone from one of the most valuable unicorn startups in the United States to a laughingstock of the investment community. Now WeWork is even considering lowering its valuation to less than $20 billion, and Softbank Corp., WeWork's largest shareholder, is discussing whether to shelve its IPO plan.

From $65 billion to less than $20 billion, from a high-profile unicorn to an "unattended" real estate agent, WeWork has fallen from heaven to real capital markets, not least because investors have found WeWork a trapped animal dragged down by high debt.

The sharing economy is actually the second landlord, and the WeWork leasing debt is the third in the world.

Founded in 2010, WeWork's main business is to lease office space through long-term leases, which are leased to short-term tenants after a series of standardized renovations and renovations. In essence, WeWork still plays the role of a second landlord.

WeWork founder and CEO Adam Neumann has long insisted that classifying WeWork as a real estate company is too narrow, and he sees WeWork as an ambitious "community company". But according to the prospectus, about 83 per cent of WeWork's revenue still comes from shared space leasing membership fees and the company's $47 billion in leasing debt, making it one of the largest in the world after oil development companies Petrobras and China Petroleum & Chemical.

This is an amazing "achievement" for a young company that boasts flexible office space and community services and has been established for less than 10 years, and most importantly, WeWork has no plans to make a profit.

Heavy debt + losses are the source of investors' deep concern about WeWork.

WeWorkThe valuation was cut twice, hitting Goldman Sachs Group in the face and being disliked by major shareholders.

Since its inception in 2010WeWork has raised $12.8 billion in 2009, making it the leader among unicorns, including $10.5 billion from the Japanese consortium Softbank Corp. Group.

Earlier this year, Japan's Softbank Corp. Group reinvested $2 billion in WeWork, valuing the company at $47 billion. Softbank Corp. and his subsidiaries hold about 29% of WeWork and are the largest shareholders.

Uber and Slack invested by Softbank Corp. have also been listed one after another this year, both of which are not profitable, and their losses are still expanding, and the current price is also lower than the offering price.. Now that the capital market is jittery, investors are pouring into safe-haven assets such as bonds and gold, making them more cautious about such heavy assets, money-burning and lossmaking companies.

• WeWork lost $933 million in 2017 and $1.9 billion in 2018

• 2019Q1's revenue was $728 million, an increase of 112% over the same period last year. Excluding one-time factors, Q1 lost $631 million.

• 2019Q2 had revenue of $807 million, an increase of 91% over the same period last year, and a loss of $510 million, compared with a loss of $397 million in the same period last year.

Cash and cash equivalents on WeWork account as of 19Q2 were about $2.5 billion. According to the Wall Street Journal,WeWork expects to spend $4 billion in 2019 and another $6 billion in 2020.This naturally raises the need for further financing. Heavy debt, expanding losses, and a cold winter in the capital markets, investor demand for subscription is cold, which is the biggest blow to WeWork.

A few days ago, WeWork slashed its target valuation to20-30 billion US dollars, much lower than the valuation of 47 billion US dollars at the beginning of the year.. At least two analysts have made it clear that the slashed valuations are still too high.

After a few daysWeWork is considering that IPO could be valued at less than $20 billion, Dow Jones said, citing people familiar with the matter.. WeWork was scheduled to launch its roadshow on Monday, but the company has now decided to hold a meeting with investors this week to decide what changes should be made to IPO.

20 billion US dollars, not only hit Goldman Sachs Group in the face, but also make Softbank Corp., the major shareholder, suffer unspeakably.According to the latest news, people familiar with the matter said that executives of WeWork and Softbank Corp., its largest shareholder, are discussing whether to shelve its IPO plan.. Instead of being tricked into listing now, it would be better to wait until the market is ready later.

Earlier, the US Stock Intelligence Agency mentionedWeWork chose a mortgage to raise $6 billion before IPO, or was afraid that IPO would follow in the footsteps of Uber and Lyft, so it tried to increase the confidence of secondary market investors in the company's capital pool and reduce the size of IPO offerings.

Unexpectedly, a month has passed and the worry has really come true.

Summary

Two big car-sharing giants, Uber and Lyft, have gone public this year, both of which belong to the asset-heavy sharing services industry with large losses. After listing, Uber and Lyft did not live up to expectations and are still below the offering price.

Combined with such painful lessons, it is not surprising that WeWork's valuation has been cut twice.

For professional investment institutions such as Softbank Corp. and Goldman Sachs Group, there are times when they are wrong, so we ordinary investors should be more careful. A company with reduced investment by major shareholders, pre-IPO cash by its founders, and plans to raise money through debt before IPO looks dangerous anyway, not to mention the risk that it is heavily in debt and at increased losses over the years.