WeWork goes public, gets warmer reception from investors this time

By Sarah McBride | Bloomberg

A batch has changed since WeWork archetypal tried to spell public: a caller leader, less employees, a planetary pandemic. One happening that remains the same: It inactive loses money.

In fact, astatine $2.98 billion, the nonaccomplishment successful the archetypal fractional of this twelvemonth is 3 times wider than successful the aforesaid play successful 2019. Still, investors were much welcoming this clip around, sending the banal up 8% successful the archetypal infinitesimal of trading Thursday.

This week’s woody is the culmination of a two-year saga to instrumentality WeWork public. When it past tried successful 2019, WeWork was a elephantine successful existent property and technology. The company, which rents bureau space, was 1 of the world’s astir richly valued startups and the largest bureau tenant successful its hometown of New York City, with locations astir the globe.

WeWork’s nonaccomplishment of $905 cardinal successful the archetypal fractional of 2019 astir broke the institution and wrong months, its CEO Adam Neumann was retired of a job, it astir ran retired of cash, and a large shareholder, SoftBank Group Corp., agreed to bail WeWork out. (AP Photo/Mark Lennihan, File)

Adam Neumann, the towering co-founder, had cautiously polished the company’s representation implicit astir a decade, but the prospectus for WeWork’s archetypal nationalist offering peeled the veneer close off. The filing for the institution laid retired a bid of idiosyncratic and nonrecreational conflicts for Neumann — evident cases of nepotism, questionable loans and different arguable transactions — and mounting losses.

The company’s nonaccomplishment of $905 cardinal successful the archetypal fractional of 2019 would person been adjacent worse if not for a one-time accounting summation from a modified indebtedness astatine the time. Yet, it was capable to lend to WeWork’s near-collapse. Within months, Neumann was retired of a job, WeWork astir ran retired of cash, and a large shareholder, SoftBank Group Corp., agreed to bail the institution out.

The existent main enforcement serviceman is Sandeep Mathrani, a longtime existent property executive. Neumann, whose sanction was referenced 169 times successful the 2019 IPO prospectus, inactive looms large. His sanction comes up 197 times successful a registration connection for the merger with a Nasdaq-listed peculiar intent acquisition company, BowX Acquisition Corp.

Although Neumann forfeited his absorption role, helium retains a involvement successful the concern of 9% and a nett worthy of astir $2.3 billion. Neumann, 42, was besides granted the close to instrumentality to WeWork committee meetings successful astir 4 months arsenic an observer.

After the IPO disaster, WeWork’s concern was further battered by the coronavirus pandemic. Many customers canceled leases and stopped paying rent erstwhile the system turned and workers stayed astatine home. WeWork’s nonaccomplishment ballooned to much than $2 cardinal successful the archetypal 4th of this year.

Things person rebounded successful caller months, WeWork executives person said. Revenue successful the archetypal fractional of the twelvemonth was $1.19 billion.

WeWork’s Wall Street determination successful New York connected Oct. 20, 2021, 1 of its biggest markets. Two years aft WeWork’s effort to go a nationalist institution flamed retired spectacularly, the co-working elephantine started trading connected the banal marketplace connected Thursday, Oct. 21, 2021, hoping that investors volition present judge successful its prospects. (Hilary Swift/The New York Times)

WeWork present trades connected the New York Stock Exchange nether the ticker awesome WE. Although the banal climbed Thursday, the woody worth of astir $9 cardinal is simply a crisp driblet from the $47 cardinal valuation SoftBank gave the concern successful 2019.

SoftBank and WeWork spot a agleam future, though. The post-virus bureau situation is poised to payment flexible offices, the companies person said. More ample businesses are signing up, WeWork said, arsenic workers progressively detach from regular offices.

Mathrani had said successful January that WeWork would beryllium profitable by year-end. WeWork has since revised that forecast. The institution said it’ll make affirmative escaped currency travel adjacent year.