WeWork To Go Public Via SPAC In Deal At Fraction of Former Valuation

WeWork is finally going public, this time through a special purpose acquisition company.

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The operator of co-working spaces around the world announced Friday that it will go public through a SPAC, merging with BowX Acquisition Corp., which counts basketball legend Shaquille O’Neal as an adviser. The SPAC deal values WeWork at $9 billion, far from the $47 billion valuation at the company’s height. WeWork is backed by investors including SoftBank.

This marks the second time the New York-headquartered company, founded in 2010, has announced plans to go public, the first being in August 2019, when it filed an S-1 registration document with the Securities and Exchange Commission to go public through a traditional IPO. That kicked off a months-long saga that resulted in co-founder and CEO Adam Neumann stepping down — eventually being replaced by Sandeep Mathrani — employee layoffs, the sell-off of subsidiary businesses, and the company being stripped of its $47 billion valuation.

After the S-1 was filed, questions emerged about the company’s governance and structure, its high losses and its company culture. As a result, the company postponed its IPO indefinitely before calling it off.

The company faced another challenge with the COVID-19 pandemic, as many people moved away from offices and co-working spaces in favor of working from home. But now with the end of the pandemic in sight and a new culture of remote/flexible work, companies are shedding commercial office space and looking to flexible workspaces. That provides some hope for WeWork going forward.

“COVID-19 has accelerated the demand for flexible workspace among organizations large and small, which WeWork is uniquely positioned to serve on a global basis,” the  company wrote in a press release announcing the SPAC deal.

The company reported $3.2 billion in revenue in 2020, excluding China, in the press release. That revenue figure is flat compared to 2019. The company didn’t disclose losses in the announcement, but Reuters reported earlier this week that it lost $3.2 billion in 2020.

Illustration: Dom Guzman