WeWork to make belated arrival on stock market after Spac merger

WeWork will finally make its debut on the stock market after the $ 9 billion merger has been approved by shareholders of a blank check company, ending the turbulent two-year public journey of the real estate group.

Shareholders of BowX Acquisition (Spac), a listed special purpose acquisition company, voted in favor of a deal with WeWork on Tuesday, allowing New York-based shared office space providers to trade on the Nasdaq Stock Exchange under ticker WE starting Thursday. I did. ..

WeWork will be a public company with a much more humble profile than when it first tried 2019And that $ 9 billion valuation is only part of the $ 47 billion valuation of the company in the number of months it invested before SoftBank failed to go public. BowX’s share price fell 7% on Tuesday.

The company has sought to reassure investors and the general public that it has eased some of the excesses scrutinized in its last listing attempt. Adam Neumann, founder and chief executive officer of the coworking group, was banished in 2019 and replaced by real estate veteran Sandeep Mathrani.

With Neumann, we’ve done some of WeWork’s more ambitious and eye-catching projects and presentations. This includes the mission of “raising the world’s awareness” and the school devised by Neumann’s wife Rebekah.

Since then, the company has reduced costs, reduced the number of offices and focused on its core business.

Nevertheless, WeWork is still losing billions of dollars. The company revealed to investors that after spending $ 2.2 billion in 2019, it lost $ 3.2 billion in 2020, despite cutting capital investment to $ 49 million.

May, Financial Times report Despite preparing to merge with BowX, WeWork’s losses were exacerbated. WeWork lost $ 2.1 billion in the first quarter of this year. This includes a $ 500 million non-cash settlement with Neumann.

WeWork will then have $ 1.3 billion Deal with BowXSpac, led by Vivek Ranadivé, founder of California-based software group Tibco.

This includes funds held in Spac trusts from BowX’s IPO and a $ 150 million investment from Cushman & Wakefield that acts as a backstop for shareholder redemptions. Investors such as Starwood Capital Group, Insight Partners and BlackRock have committed an additional $ 800 million through private investments in public equity.

Softbank, which helped WeWork avoid bankruptcy with billions of dollars in bailouts, provided WeWork with $ 550 million in senior-backed bonds.

In an investor presentation earlier this month, WeWork said post-pandemic workers in the world are looking for more flexible workspaces and putting them in the best position to make a profit.

However, the company’s revenue is now below the $ 3.2 billion forecast for 2021. In a recent presentation, WeWork said it had total revenues of just under $ 1.2 billion in the first half and is expected to reach $ 1.5 billion in the second half.

WeWork’s actual revenue in the third quarter was approximately $ 658 million. This means that we need to bring in just over $ 806 million from October to December to meet the revised second half forecast.

WeWork to make belated arrival on stock market after Spac merger Source link WeWork to make belated arrival on stock market after Spac merger

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