Analysis: WeWork's future looks tumultuous as it pushes back IPO

The We Co, parent company to coworking giant WeWork, is setting up to begin its roadshow, an event that is set up to do the startup some good, but those who have been keeping an eye on the company's fiscal path suspect that it might not hit the mark.

WeWork’s valuation, $47 billion in a private funding round last January, could be set as low as $12 billion.

Investors will no doubt be distrustful of any evidence of apparent self-dealing by the Chief Executive Officer, Adam Neumann, such as buying properties and leasing them to the company. (WeWork recently took additional steps to change some of the unorthodox aspects of its governance structure and seek an independent board member.)

As the nine-year-old office-sharing startup continues its stumble to the public markets, some prognosticators see this moment as something more significant: that a WeWork belly-flop portends the end of the unicorn era in Silicon Valley.

The argument goes like this: SoftBank, the Japanese conglomerate and its $100 billion Vision Fund, has become an engine pushing the technology market to its limit. If it’s forced to retreat on its $10 billion commitment to WeWork, SoftBank will reconsider the nearly blind sanguinity that has perverted incentives for founders and distorted valuations in the industry over the last few years.

In this seductive vision of a calamitous—and cleansing—WeWork initial public offering, modesty will once again return to Silicon Valley; humbled venture capitalists will stop bidding the valuations of unprofitable startups into the stratosphere; and the unicorns—those magical startups worth a $1 billion or more—will be put out to pasture, their legendary horns clipped like the tusks of poached African elephants.

But that’s probably wishful thinking.

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