This week’s deal is the culmination of a two-year saga to take WeWork public. When it last tried in 2019, WeWork was a giant in real estate and technology. The company, which rents office space, was one of the world’s most richly valued startups and the largest office tenant in its hometown of New York City, with locations around the globe.
Adam Neumann, the towering co-founder, had carefully polished the company’s image over nearly a decade, but the prospectus for WeWork’s initial public offering peeled the veneer right off. The filing for the company laid out a series of personal and professional conflicts for Neumann — apparent cases of nepotism, questionable loans and other controversial transactions — and mounting losses.
The company’s loss of $905 million in the first half of 2019 would have been even worse if not for a one-time
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After the last IPO disaster, WeWork’s business was further battered by the coronavirus pandemic. Many customers canceled leases and stopped paying rent when the economy turned and workers stayed at home. WeWork’s loss ballooned to more than $2 billion in the first quarter of this year.
Things have rebounded in recent months, WeWork executives have said. Revenue in the first half of the year was $1.19 billion.
WeWork now trades on the New York Stock Exchange under the ticker symbol WE. Although the stock climbed Thursday, the deal value of about $9 billion is a sharp drop from the $47 billion valuation SoftBank gave the business in 2019.
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SoftBank and WeWork see a bright future, though. The post-virus office environment is poised to benefit flexible offices, the companies have said. More large businesses are signing up, WeWork said, as workers increasingly detach from regular offices.
Mathrani had said in January that WeWork would be profitable by year-end. WeWork has since revised that forecast. The company said it’ll generate positive free cash flow next year.
