SAN FRANCISCO (Reuters Breakingviews) - Japan’s SoftBank isn’t the only firm with outsized investment connections to WeWork. JPMorgan has helped line up a giant loan for the office sublessor and lent hundreds of millions of dollars to Chief Executive Adam Neumann. Funds advised by the bank are also one of the largest investors in parent The We Company. With the firm’s planned initial public offering increasingly in doubt, that’s looking less and less smart.

Jamie Dimon’s bank has hung jackets on a lot of WeWork’s chairs. Mostly through clients of its asset-management arm, JPMorgan entities collectively have more than a 5% stake in the company, according to its latest draft prospectus. That makes the U.S. lender one of the top non-insider shareholders. It participated in four fundraising rounds, according to WeWork’s filing, with the last effort valuing the company at around $16 billion in 2015.

That may have helped JPMorgan land a lead IPO underwriting role, along with Goldman Sachs, whose affiliates are also WeWork investors. Furthermore, JPMorgan is part of a group of banks that have offered a $6 billion credit facility to WeWork, conditioned on its IPO raising $3 billion. Neumann decided this week to postpone the offering after indications that it would fall short of that target.

Then there’s the colorful, controversial CEO himself. JPMorgan and other banks extended a $500 million personal credit line to Neumann, secured on his shares in The We Company. Dimon’s firm separately provided him with mortgages and other loans totaling almost $100 million.

The company says it still plans to go public in 2019. But investors have already balked at anything like its $47 billion private-market valuation earlier this year, with news reports suggesting possible targets as low as $10 billion.

It’s typical for banks to provide multiple services to a hot new client. JPMorgan was among the lenders that did business with Facebook before landing a lead underwriting role for its 2012 IPO. Not all such bets pay off, though. SoftBank and its Vision Fund are in much deeper. And JPMorgan may still have cushion for both its credit and equity exposures. Even if so, it’s a lot less well stuffed than it seemed just weeks ago.

CONTEXT NEWS

- WeWork owner The We Company said on Sept. 16 that it expected to complete its initial public offering this year, postponing an IPO that had been expected in September. Entities associated with JPMorgan, including its digital growth fund, in aggregate have at least a 5% stake in the office-sharing startup, according to We’s prospectus.

(Editing by Richard Beales and Leigh Anderson)

© Reuters News 2019