A Refreshed WeWork Goes Public, Finishing Up On Its First Day
Following its IPO fiasco of 2019 and a series of scandals, WeWork began trading on the New York Stock Exchange under the ticker symbol “WE” yesterday. Shares of WeWork Shares closed 13.5% higher at $11.78 Thursday, according to The Wall Street Journal.
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The flexible space provider company went public through a combination with BowX Acquisition Corp., a special-purpose acquisition company (SPAC), according to an announcement.
The business combination, which closed on Oct. 20, provides WeWork with the previously announced gross cash proceeds of approximately $1.3 billion, prior to expenses, according to the announcement.
“Today is a testament to the determination of our company to not only transform our business but also to adapt and deliver the options that today’s workforce demands. As companies around the world reimagine their workplace, WeWork is uniquely positioned to offer the space and services that can power solutions built around flexibility,” Sandeep Mathrani, CEO of WeWork, said in the statement.
“Providing employers and landlords around the world with our holistic offering of space-as-a-service, All Access and workplace management technology will enable WeWork to lead the market in mainstream adoption of flexible space.”
In 2019, WeWork’s IPO fell apart as the company faced questions about its corporate governance and how much it was worth and about its then-CEO Adam Newmann, according to The Wall Street Journal. Neumann stepped down shortly after. The company’s new CEO, Mathrani, has since closed locations, renegotiated leases and cut thousands of jobs to reduce expenses during the COVID-19 pandemic, according to the WSJ.
Jonathan Anastas, Chairman at Alpha Tech tells GOBankingRates that 2021 has become the year when companies who were previously unable to go public have managed to do so.
“And, often, with less attractive profit and loss positions than at the time pre-COVID when public markets rejected the offering. WeWork, Soho House, WME and others,” he says. “Rising inflation has driven up risk tolerances so investors can be net positive after inflationary give-backs. Possible increases in future capital gains tax rates have pulled deals forward. And — potentially scariest of all — COVID has allowed some “pandemic understanding” for losses and burn rates that are actually reflective of larger systemic business issues than the COVID forgiveness accounts for.”
He adds that “newish fiscal instruments, SPACs, direct offerings and others have given a wider set of options to those companies looking for a quick exit. The big questions will all be answered at the first indication of an economic downturn.”
Plans for the merger with BowX Acquisition Corp. were first announced in March, in a deal that reportedly valued the company at roughly $9 billion, CNBC reports. This is a sharp drop from 2019 when WeWork was initially valued at $47 billion by SoftBank Group. Its valuation slowly lowered as news of the company’s finances unraveled and investor demand diminished.
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The company reported that the third quarter 2021 preliminary total revenue was $658 million, an increase of approximately 10% compared to the second quarter 2021 revenue of $593 million. Across consolidated operations, total occupancy continued to increase to 60% at the end of the third quarter 2021, up from 52% at the end of Q2 2021, according to the announcement.
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This article originally appeared on GOBankingRates.com: A Refreshed WeWork Goes Public, Finishing Up On Its First Day
