MBS 665 BUSINESS VALUATION (Individual Assignment) INTERNAL STUDENT Critique of Article (20%) The student is required to carry out a critique of an article relating to the subject of business...

ADVANCED ACCOUNTING
BUSINESS VALUATION— CRITIQUE OF ARTICLE
Table of Contents
Introduction    3
Key Issues in the Case    3
Relation of the Issues to the Topic    4
Evaluation to the Main Issue in the Case    4
Comments/Opinion Relating to the Case    5
Conclusion    6
References    7
Introduction
WeWork was founded in 2010 in the Soho district of New York City to provide co-working space, primarily for freelancers and small start-ups. This company usually deals in the long-term lease agreements with real estate companies to provide space for corporate, housing and education, Most of these leases agreement have time duration of 10 years. As WeWork is the start-up company, it need money to perform its business operation. WeWork issued its first initial public offer (IPO) in 2019, IPO spikes but dropped shortly. After that, Company was incurring losses and it became hard to sustain their business operation in market. The SoftBank came as a rescuer and made investment of 7.8 billion dollars.
Key Issues in the Case
In this case, of WeWork, the company did not took valuation according to the market capitalization, as the company is startup companies such as Uber. Investors should get the value of the company through the future prospects of WeWork. Majority of the investors who invested their money in WeWork took profitability and growth in future as WeWork is the new company and that is the key issue of the company, but somehow WeWork was able to raise money from the market despite having losses and Market conditions have become more competitive.
Corporate Governance can be considered as the main reason behind the failure of WeWork. The company lacks in corporate governance, these are the process, rules and activities, by which the company directly controls and tries to balance the interest of all stakeholders. WeWork business valuation model has not been considering losses and raising expenses, buying new palaces in most populated places in United States. There is no strong relationship between...