WeWork Finally Makes Its Public Debut
WeWork to Begin Trading Today
Two years after WeWork’s failed IPO bid, the shared office space company’s deal to go public via a SPAC received the green light from investors. WeWork, which is merging with BowX Acquisition in a $9 billion deal, is slated to begin trading under the ticker WE on the New York Stock Exchange today. The transaction is expected to give WeWork cash proceeds of around $1.3 billion.
Of the money, $150 million comes via an investment from Cushman & Wakefield (CWK). Investors including Starwood Capital, Insight Partners, and BlackRock (BLK) have committed an additional $800 million. Investors appear willing to shrug off losses at WeWork which amounted to $3.2 billion last year even though the company cut expenditures by $49 million.
WeWork Tries to Improve Its Image
WeWork has come a long way since its first IPO attempt in 2019. In the weeks leading up to WeWork’s failed public debut, the company was valued at around $47 billion. However, questions about its management, mounting losses, and its real value sank its IPO aspirations.
WeWork has worked hard to clean up its image, ousting founder and former CEO Adam Neumann, and putting a veteran real estate executive in charge. The company has also slashed costs, reduced the number of office locations it owns and operates, and refocused on its core business. Despite these efforts, WeWork is still losing billions of dollars.
What’s Ahead for WeWork?
WeWork is betting that as the pandemic subsides, employees and companies will want flexible work spaces. WeWork believes it is in a good position to capitalize on this trend, but sales have yet to materialize as expected. The company recently cut its revenue projections for the year from $3.2 billion to $2.7 billion.
WeWork is debuting on the stock market with a much smaller valuation than when it first tried to go public. There are a lot of unknowns about the office real estate industry in the late stages of the pandemic, and about WeWork’s future. It will be interesting to see how investors feel about WeWork’s potential.
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