| Hi readers, How the mighty have fallen! WeWork, whose CEO Adam Neumann claimed he was going to be the first-ever trillionaire (and live forever), is now private jetless and walking shoeless around NYC's Gramercy neighborhood. In just a whirlwind couple of weeks, $47 billion WeWork — once one of the world's most valuable startups — pulled its IPO after reports that its valuation could fall as low as $10 billion, lost the backing of its biggest investor SoftBank, and saw the ousting of at least 20 members of Neumann's inner circle. Neumann himself was removed as CEO after investors blamed him for the company's profitability woes and questioned his personal behavior and self-dealing. If you aren't yet a subscriber to Wall Street Insider, you can sign up here. (Side note: If you are having trouble keeping up with the latest news in this incredibly fast-moving story, I don't blame you. BI has assembled an easy-to-follow timeline of all the highlights). There's a bunch of potential fallout from the WeWork saga that will be interesting to watch: - Is the IPO window now shut for money-losing startups? WeWork's shelved IPO wasn't the only letdown from a buzzy consumer company this year. Fitness company Peloton saw its public debut this week fall flat, following disappointing IPOs from Uber and Lyft. Entertainment company Endeavor also pulled its IPO this week. What does this mean for other hot startups that planned to go public like Airbnb or Postmates later this year or early next?
- Future of SoftBank's Vision Fund. The $100 billion Vision Fund, which has poured money into TikTok parent ByteDance, ride-hailing firm Uber, and office-sharing firm WeWork,is now facing questions from critics about how sustainable it is to flood fast-growing companies with hundreds of millions of dollars. Two of the biggest investors in SoftBank's original Vision Fund are debating whether to significantly cut back on their commitments to a planned second one, Bloomberg reported. The investors' debates over their commitments to the second Vision Fund come as the original fund is reportedly down $600 million on its stake in Uber and as it prepares for a big drop in the value of its WeWork investment.
- Impact on the New York City real estate market. WeWork has become a dominant player in the office market in many major cities. In New York and London, WeWork is the largest private sector office tenant. What would it mean for the city's commercial real estate market if WeWork were to go away?
- Ripple effects on the co-working model. The introduction of coworking companies like to major urban office markets could bring new risks when the next economic downturn strikes, Eric Rosengren, the Boston Federal Reserve president, said earlier this month. Coworking businesses "are creating a new type of potential financial-stability risk" and could bring massive commercial real-estate losses in a recession, Rosengren said, without naming WeWork specifically.
Readers, what else should we be writing about? Drop me a line any time at ooran@businessinsider.com to let me know. Olivia
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