Fidelity Contrafund cuts value of WeWork stake by 35%

Reuters

Published Oct 30, 2019 10:17AM ET

Fidelity Contrafund cuts value of WeWork stake by 35%

By Tim McLaughlin

BOSTON (Reuters) - Fidelity Investments cut the value of Contrafund's stake in WeWork Companies Inc by 35% in September amid turmoil surrounding the office-sharing startup's failed initial public offering (IPO).

Fidelity disclosed on Wednesday that Contrafund (O:FCNTX) held $193.1 million in Series E WeWork shares at the end of September, down from $295.1 million the previous month. The valuation cut assumes no shares were bought, sold or transferred between the two periods.

Fidelity declined to comment.

The $100 billion-plus Contrafund is run by Will Danoff, one of the top stock pickers in the U.S. mutual fund industry over the past 25 years. Contrafund bought $179.7 million worth of WeWork's Series E shares in June 2015, according to fund disclosures. Fidelity valued those shares at $411.5 million at the end of 2018.

Fidelity and other mutual fund companies have invested in pre-IPO companies to juice their returns. WeWork looked like another promising bet before the value of its equity cratered as questions surfaced about its financial viability.