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WeWork won’t work at $47 billion, that much seems settled. The question is, will it work as a public company?

The We Company was last privately valued at $47 billion in January, but following backlash from the company’s prospectus (which illuminated problems with cash burn, corporate structure, and ample liabilities), public investors seem to want a steep discount.

That’s led to speculation that the IPO may even be delayed, with the Financial Times reporting Monday that SoftBank (WeWork’s largest outside investor) is pushing the company to postpone. But sources reportedly told CNBC Tuesday morning that the IPO is a go, and that the company is expected to begin its roadshow next week. (WeWork is currently in a quiet period and declined Fortune‘s request to comment.)

But if all does go ahead, a We IPO could come at far less than anticipated.

“I’m sure it’s disappointing for the private investors, but it’s the reality of the public market and what the public market is willing to accept,” says Kathleen Smith, principal at Renaissance Capital, a provider of institutional research and IPO ETFs.

And as a year that has seen some companies with huge private valuations and IPOs (like Uber’s $8 billion) fall flat once they debut in the public markets, it’s no surprise that both insiders and outsiders are wary of pricing.

“The things that are going on behind the scenes are [that] all the private investors don’t want a markdown, but the public market doesn’t want to lose money—so there’s that tug and pull, and I think in this case, the public investors are going to prevail,” Smith suggests.

This “tug and pull” is nothing new, but analysts suggest it’s been especially obvious in the 2019 IPO frenzy.

“The public … have a different lens than the private equity, so it doesn’t mean that one’s right and one’s wrong,” D.A. Davidson’s Barry Oxford told Fortune. “When it comes to WeWork, we have another large company with a very high valuation that is hemorrhaging cash—[investors] need a very steep discount.”

Inside investors

Part of the issue is that WeWork’s mid and late-stage investors were poised to reap huge gains at a $47 billion valuation, but far less at a $20 billion valuation or below.

Of course, there’s SoftBank—who owns roughly 29% of WeWork’s stock, according to one executive on a call with analysts. The conglomerate initially scooped up $1.3 billion worth of shares from existing investors and employees in 2017 (when the company was worth almost $17 billion), and then bought in to We in a Series G funding round in August of 2017 at $57.90 per share, pushing We’s valuation to over $21 billion (close to We’s supposed new valuation target), according to PitchBook. SoftBank bought more shares in a secondary transaction from investors and employees for $1 billion in January in connection with $5 billion in financing (including a $1 billion convertible debt portion and $3 billion warrant agreement) in January at a post valuation of $47 billion, according to PitchBook.

The conglomerate stands to lose a hefty sum of their latest influx of investment ($5 billion at $47 billion post valuation) if We goes for anything close to $20 billion.

But the good news? Since SoftBank staggered their investments in We (and bought in at different prices), they may be slightly more shored up for a heavy discount than some suggest.

“Private equity is longer money, more patient money, and so the fact that maybe a Softbank does $1 billion at $47 billion, they don’t get all hyped up about that,” D.A. Davidson’s Oxford says. “They’re looking at their bigger investment and what it can be five, six years out.”

Still, other early investors would stand to make a chunk of cash, even at a lowered valuation near $20 billion. Benchmark, another one of We’s major investors (according to their S-1), first bought in during a $150 million, four-investor Series C funding round in February of 2014, at $26.97 per share (valuing the company at $1.49 billion), according to PitchBook. Benchmark also got in on a $335 million Series D round later in 2014 at $16.65 per share, a 2015 Series E round at $32.89 per share, and a Series F round in 2016 at $50.19 per share.

Even at $20 billion, Benchmark could see a return of their initial investment of over 100% (based on We’s Series G share price of over $57, which then valued the company at roughly $20 billion). And even at Benchmark’s last investment at around $50 per share, a $20 billion IPO would still make the firm a little bit of cash.

Additionally, J.P. Morgan, who is among We’s largest investors, also first invested at $26.97 a share in 2014 (and subsequently at $16.65, $32.89, and $50.19 per share, according to PitchBook)—and is likely to see a mixed return. Based on their last investment, J.P. Morgan could make roughly a 15% return based on We’s Series G share price, and potentially over 100% from their initial investment in Series C.

Yet as we’ve seen for 2019 IPOs, what investors could make as a return when the company goes public and what they actually might make once they’re able to liquidate are entirely different matters. In fact, insiders at mega IPOs Lyft and Uber (among the latter is WeWork investor SoftBank) are currently down around 20-30% from the companies’ respective IPO prices—which brings us to We’s next problem.

Pricing pressure

A major concern for investors (private and public alike) for We has been the increasing pressure to price the company’s IPO correctly if it proceeds.

“It’s this resolution of a very big disconnect in what private companies are being given by way of valuation versus what the public market is going to do,” Renaissance’s Smith says. “The underwriters … and this company have to put a valuation that will not break its IPO price in the months beyond the IPO because investors are so sensitive about it. They already have been burnt by Uber and Lyft, and so … that’s why I think there’s the pressure on valuation.”

Whether the price is right at $20 billion or not, We may be between a rock and a hard place. While some investors will likely still make some returns if WeWork forges ahead with an IPO, the company’s valuation squeeze points to the growing dichotomy between private and public markets—and their expectations.

And, as WeWork debates its future, the co-working company needs to be careful, analysts say. “You don’t want to go out on the roadshow and be left at the altar,” as D.A. Davidson’s Oxford puts it.

WeWork IPO: There’s a ‘Tug and Pull’ Over Valuation Between Insiders and Potential Investors

Inside investors

Pricing pressure

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