T. Rowe Price Group Inc. (NASDAQ: TROW) regrets investing in WeWork in 2014, it said in a filing with the SEC on Thursday.
Asset Manager T.Rowe Price wrote a letter to its shareholders as part of its annual report and admitted that their “small private investment” in WeWork is a “terrible investment.”
The company admitted that when it made the investment, they had an understanding that the management intended to “slow the company’s blistering pace of growth and focus instead on developing a more sustainable business strategy.”
The asset management firm said WeWork kept ignoring their advice.
T.Row Price revealed in its letter to investors in December 2019 that the WeWork CEO Adam Neumann had promised profitability was “just over the horizon.” Instead of taking him at his word, they expressed their displeasure to WeWork’s management and board. The company tried to exit its investment in early 2019 entirely, but WeWorks’ management refused to approve the underlying transactions.
The failure of WeWork’s IPO has left T.Row Price holding shares a mere fraction of their “earlier value.”
Why It Matters
T.Row Price said that their cautious approach towards the private market had limited the damage and they seek to learn from their missteps.
As for whether WeWork’s new management can improve operations somewhat, the asset manager thinks, “it’s possible.”
T.Rowe Price shares were unchanged at $136.42 in the after-hours session on Thursday. The shares had closed the regular session 1.49% lower at $136.42.
See more from Benzinga
- Miami Herald Publisher McClatchy Files For Chapter 11 Bankruptcy
- Bloomberg Campaign Turns To Memes To Get Him Elected
- Barclays CEO Under Investigation For Ties With Jeffrey Epstein
© 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.