WeWork is a real estate company that offers flexible modern workspaces for a variety of companies. The key differentiator of the company is that companies can rent out a renovated space for as little as a month or as long as needed. They recently agreed to merge with the BoWX Acquisition Corporation SPAC which has them valued at nine billion dollars with debt included. Through this merger, WeWork aims to raise 1.3 billion dollars.
This deal comes two years after WeWork’s failed attempt to go public via an IPO. Their former CEO Adam Neumann said he would only allow the company to go public if NYSE heads agreed to ban certain plastics or meats from their cafeterias. In the end, this initiative did not see a lot of support and the IPO was scrapped. When the IPO was cancelled, the value of the company dropped from fourty-seven billion to eight billion dollars.
WeWork got hit hard by the pandemic. Their business model accommodated lots of workers in small spaces and also allowed leases to be cancelled with a month’s notice. At the end of 2020 the occupancy of their buildings was at only forty-six percent. The company lost close to four billion dollars in 2020 and in 2019. In turn, they are utilizing the SPAC trend to raise money. They expect their buildings to be sixty-one percent full by October and seventy percent occupied by the end of the year.
https://www.wsj.com/articles/wework-agrees-to-spac-deal-that-would-take-startup-public-11616752804
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