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WeWork’s parent company is expected to delay an IPO that had been expected as soon as next week, according to The Wall Street Journal, which reported that the offering is likely to be shelved until at least October.
“The We Company is looking forward to our upcoming IPO, which we expect to be completed by the end of the year,” the company said in a statement. “We want to thank all of our employees, members and partners for their ongoing commitment.”
WeWork has attempted to defuse investor concerns and outside criticisms by promising to add new board members, announcing an overhaul of its corporate governance structure and having its CEO repay millions for a trademark he had sold to his own business.
But the company’s potential valuation has fallen dramatically from the $47 billion figure established by private investors. The Journal reported earlier this month that the valuation could dip below $20 billion. CNBC later suggested the number could fall below $15 billion. Not to be outdone, Reuters said it could be as low as $10 billion.
The big question is whether WeWork is deserving of being singled out for such treatment. After all, it’s just the latest in a string of unprofitable tech darlings to pursue an IPO. Here’s CNN Business’ Seth Fiegerman on the lessons that can be learned from WeWork:
Whether WeWork ultimately goes public at a $20 billion valuation, a $10 billion or not at all, its turbulent road to Wall Street — and the flurry of changes announced in recent weeks — could prove to be a reality check for the wider startup industry. For years, Silicon Valley has enabled, if not outright encouraged, startups to seek stratospheric valuations, bleed eye-popping amounts of money and institute little to no checks on a founder’s power. Now, the public market is signaling that yes, in fact, there are limits to what they’ll back.
Crude prices dip after Trump changes tone
Oil prices have pulled back slightly after President Donald Trump adopted a softer tone on potential retaliation against Iran following a devastating attack on Saudi Arabia’s crude production.
US oil futures were trading at $62.33 per barrel, a 0.9% retreat from Monday’s gains. They had fallen more than 2% earlier in the day. Futures of Brent crude, the global benchmark, declined 0.4% to $68.75 per barrel, paring losses of as much as 1.9%.
What happened on Monday: The price of US oil jumped nearly 15% to settle at $62.90 per barrel — its biggest daily percentage increase in more than a decade. Brent gained 14.6%, settling at $69.02 a barrel.
Higher prices come at a terrible time for the global economy. My colleague Julia Horowitz sets the scene:
Washington and Beijing are locked in a bitter trade war involving tariffs on hundreds of billions of dollars worth of goods. Consumer and business sentiment is suffering as global manufacturing contracts.
In China, the economic data is bleak. Germany is on the brink of recession, and there’s still a chance that United Kingdom could crash out of the European Union without a deal to protect trade.
The upshot: Although Saudi production could quickly get back on track, preventing a sustained spike in oil prices and a jump in inflation, the attacks adds to an environment of uncertainty that’s been weighing on growth.
What striking GM workers want
The United Auto Workers union is on strike against General Motors.
It’s a big deal: This is the biggest strike by any labor organization in the United States since 2007. GM, America’s largest automaker, has nearly 50,000 fulltime and temporary UAW members on its payroll.
The striking workers want higher hourly wages, lump sum payments and a better profit sharing plan. They also want GM to agree to limit the use of temporary workers and give them a clearer path to permanent employment. The UAW says the two sides are far apart on other issues including health care benefits and job security.
One major point of contention is the fate of two iconic assembly lines that GM has targeted for closure.
According to a person familiar with the matter, GM is offering to build an electric truck at Detroit’s Hamtramck factory and make batteries for electric vehicles in Lordstown, Ohio. Lordstown, which went dark in March, used to produce the Chevy Cruze sedan.
Even if union agrees to those terms, work wouldn’t start immediately. The plants would likely remain dark for some time. Production would start sometime in the next four years.
Chewy and FedEx both set to report earnings after US markets close.
- US industrial production for August arrives at 9:15 a.m. ET.
- That’s followed by the NAHB Housing Market Index for September at 10 a.m. ET.
Coming tomorrow: It’s time for the Federal Reserve’s decision on interest rates.