Preparing for an initial public offering (IPO) is often a
strenuous undertaking. Companies strive to ensure that all their
affairs are in order before they submit their S-1 filing to the
SEC. This is done primarily to make sure that the initial public
offering IPO is well received by investors.
WeWork
WeWork first filed its prospectus on August 14th 2019. Two main
components of the filing prompted investor backlash. First and
foremost, investors were alarmed at WeWork's consecutive and
increasing financial losses over the past three years. Secondly,
investors took note of the company's unusual governance
practices. Although a justification could be provided for the
financial losses, namely that they were essential to their growth
strategy, no justification could be provided for the latter. With
lazy governance practices increasingly linked to poor company
performance, WeWork responded by making sweeping changes to assuage
concerns.
