Investors are expressing deep disappointment and regret as View Inc., a smart window company backed by SoftBank and other prominent investors, approaches the brink of collapse.
The company, which sells tint-shifting windows that promise energy savings, has faced accusations of fraud, a sharp decline in its stock price, and financial misreporting. These issues have raised doubts about the company’s suitability for public listing and give multiple great examples of how to not run a business.
View Inc.’s Smart Windows Revolutionizing the Industry
View Inc. gained attention and significant investments by claiming its smart windows would revolutionize the industry. These windows were made with electrochromic glass could automatically adjust their tint based on the sun’s position, providing cooling benefits and substantial energy savings.
The company’s transparent circuit boards also served as computer screens or presentation displays. Investors, including SoftBank and sovereign wealth funds, poured over $2 billion into the company.
However, the ambitious promises made by View Inc. have crumbled under various challenges and missteps from its executives. Reports emerged that the company had laid off nearly a quarter of its workforce earlier this year. Furthermore, View Inc. recently settled charges brought by the Securities and Exchange Commission (SEC) regarding its failure to report $28 million in liabilities before its SPAC merger. While the SEC did not impose fines because the company reported the misdoing itself, the allegations have severely damaged the company’s reputation.
Another blow came when it the COVID-19 pandemic hit and almost no one was focused on improving their office buildings.
Forbes reported that View Inc. now faces an existential crisis. NASDAQ has warned the company about potential delisting, and View Inc. announced plans to cease operations by September due to a lack of funds. The company’s stock price has plunged from a peak of $12.49 in 2021 to a mere 13 cents, leading to a valuation of just $33 million.
Investors, including Greg Bohlen of Union Grove Venture Partners, have expressed their disappointment and regret. Bohlen initially invested in View Inc. in 2013 based on the strength of its technology. He said:
“It’s an embarrassment. It should never have been a public company.”
Bohlen cited high costs, the detrimental impact of the COVID-19 pandemic on the construction industry, and View Inc.’s financial reporting issues as factors that made it ill-suited for the public market.
The CEO’s Defense
View Inc. CEO Rao Mulpuri, on the other hand, defended the decision to go public, emphasizing the $800 million raised through the SPAC merger. Mulpuri attributed the company’s current issues to negative press coverage of the accounting restatement and the downturn in the office sector due to the pandemic.
He also stressed that the window defect was limited to older models that have not been sold since 2019.
While View Inc. explores options to raise additional funds, including discussions with existing investors for a $150 million senior convertible note, major investors such as SoftBank, New Zealand Superannuation Fund, and Singapore’s GIC Sovereign Wealth Fund declined to comment.
Scott Rechler, a View Inc. board member and CEO of RXR Realty, expressed confidence in the company’s potential value, highlighting its extensive patent portfolio and research and development efforts. Rechler also noted that View Inc.’s glass has become more affordable due to a tax credit included in Biden’s inflation reduction act.
Mirroring Other SPAC-Merged Companies
View Inc.’s struggles are not unique among high-profile companies that went public through SPAC mergers. Others, including WeWork, Nikola, and Latch, have experienced significant declines in their stock prices. This trend of failing SPAC companies isn’t entirely surprising as the process takes away much of the regulatory rigor and scrutiny from the process of going public. However, View is performing especially bad even among its failed SPAC peers.
Pavel Molchanov, an analyst at Raymond James, noted that View Inc.’s accounting missteps played a substantial role in its declining share price.
Despite the challenges, View Inc. remains committed to its vision of providing climate-friendly, multi-purpose windows for commercial buildings. The company has installed its windows in over 400 buildings and counts approximately 100 customers.
However, the road ahead is uncertain, and the company’s ability to continue operations hinges on its ability to secure sufficient capital resources.
As View Inc. struggles to regain investor trust and stabilize its financial situation, its journey serves as a cautionary tale for other venture-backed firms considering going public.
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