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The planned initial public offering (IPO) of We Company, aka WeWork, has run into some serious headwinds. The company was prepared to commence its IPO roadshow next week with a valuation of $47 billion, based on its last capital raise in 2018. That valuation may now be cut in half or more.

It seems that potential investors are concerned about We’s massive losses and its cozy deals with co-founder and CEO Adam Neumann, according to a report in The Wall Street Journal. Neumann went to Tokyo last week to discuss a further infusion of capital with Softbank’s CEO Masayoshi Son, either by buying a big chunk of the IPO or investing enough to delay the IPO until next year.

But how much is enough? In the 12 months through June of this year, We lost $1.67 billion. According to its amended IPO filing, the company had $2.47 billion in cash and cash equivalents on June 30 and contractual obligations totaling nearly $4.2 billion for the rest of 2019. We also reported long-term debt totaling $1.34 billion.

If We cannot conclude its IPO this year, it faces some serious problems. The company plans to originate a new $2 billion credit facility at the time of its IPO, along with a $4 billion delayed-draw term loan. The delayed-draw loan will only be made if the company raises at least $3 billion in its IPO. At a valuation of $47 billion that’s a bit more than 6% of the company; at a valuation of $20 billion, that represents 15% of We’s outstanding stock.

In its IPO filing, We says that its “high level of debt” could limit its ability to obtain more financing, require a “substantial” share of its cash flow to be directed to loan repayments, and increase its “vulnerability” to adverse changes in economic conditions. About $1.1 billion of the company’s available cash is either restricted ($576 million) or committed to settling the obligations of variable interest entities ($536 million) with stakes in the firm.

Sales and marketing expenses more than doubled in the first six months of 2019 to $320 million, compared with $140 million in the same period of 2018. In the near term, these expenses could rise sharply as the company expands globally. The company’s business model is not exactly surrounded by a wide and deep moat, nor is it a proven winner. Commercial real-estate mogul Sam Zell blasted We’s business model earlier this week in an interview with CNBC, noting that “Every single company in this space has gone broke.”

U.K.-listed IWG, for example, offers a similar service in several global markets and made a profit of more than $500 million last year. IWG plans a spin-off of its U.S. business into a separate company that could be valued at around $3.7 billion. The company is already the world’s biggest provider of shared office space, with about 60 million square feet compared to We’s 45 million. Not surprisingly, perhaps, IWG is looking for investment banks that have no role in the We IPO.

In his interview with CNBC, Zell also likened We’s business to the now-defunct savings and loan business: “That’s really what you’re talking about, creating long-term liabilities and short-term assets.” In the IPO filing, We describes its obligations this way:

Substantially all of our leases with our landlords are for terms that are significantly longer than the terms of our membership agreements with our members. The average length of the initial term of our U.S. leases is approximately 15 years, and our future undiscounted minimum lease cost payment obligations under signed operating and finance leases was $47.2 billion as of June 30, 2019.

We has provided credit support of around $6 billion for those obligations, but the company “may be obligated to make all required rental payments.”

If the IPO is not completed in 2019, We may have to depend on Softbank’s willingness to pour more capital into the firm to keep it going into next year. The Japanese firm currently owns about 29% of We, and tossing in more cash could be viewed either as protecting its investment or throwing good money after bad. Stay tuned.