Goldman Sachs loses $80 million in WeWork investment
Goldman Sachs has lost out on an $80 million investment in WeWork, reports The Guardian.
Initially, the bank refused to announce on its losses regarding its investment in the financially troubled office-sharing space. However, according to Stephen Scherr, the chief financial officer, the bank had to make the announcement public as it had “got quite a bit of notoriety in the press.”
As of now, the value of the holding has fallen down to $70 million. Although the valuation could plummet further, Scherr said Goldman could still make money on its investment.
Once a highly valued U.S. company, WeWork is now undergoing a financial crunch. The company started off by cancelling its IPO and having CEO, Adam Neumann step down. Now, the company is weighing plans to fire 2,000 people, 13 percent of WeWork’s 15,000 staff.
Had the company successfully launched its share sale, Goldman and JPMorgan were preparing loans worth $6 billion.
JP Morgan and Softbank, the Japanese investment firm that is WeWork’s largest backer, are now working on alternative financing options.