Nearly two years after its attempted initial public offering of shares disintegrated, WeWork is going public in a merger with a special-purpose acquisition company.
WeWork is merging with BowX Acquisition, a SPAC, in a transaction that would value the embattled communal office-space company at $9 billion plus debt, the companies said in a joint statement Friday.
That is far below the $47 billion valuation given the New York venture in September 2019 when WeWork's IPO imploded after massive losses were revealed in regulatory filings.
WeWork said it would also raise $1.3 billion. The listing plan was first reported by the Wall Street Journal.
The company said during a call with industry analysts Friday that it anticipates strong growth as the economy recovers. WeWork anticipates 1.5 million total memberships at some point in 2024. That compares with 2020's 476,000 memberships. Revenue, excluding ChinaCo, is predicted to climb to $7 billion, more than double last year's revenue.
WeWork leases buildings and divides them into office spaces to sublet to members, which include small businesses, start-ups and freelancers who want to avoid laying out funds for permanent office space. The company's operating expenses were exorbitant and it became reliant on repeated cash infusions from private investors.
CEO and founder Adam Neumann, known for erratic behavior as much as for his innovative vision, was pushed aside. He used some of his WeWork stock to secure a $500 million personal loan prior to the IPO. He also drew criticism after The We Company — WeWork’s recently renamed parent — paid him nearly $6 million for the trademark “We.” He returned the money following a backlash.
“WeWork has spent the past year transforming the business and refocusing its core, while simultaneously managing and innovating through a historic downturn," Sandeep Mathrani, who took over as CEO after Neumann's ouster, said in a prepared statement. “As a result, WeWork has emerged as the global leader in flexible space with a value proposition that is stronger than ever."
Neumann co-founded WeWork in 2010 with one shared office in Manhattan. It now has 850 locations in 150 cities around the world.
WeWork's business model may well have better prospects after the coronavirus pandemic than it did before, commercial property experts said.
For starters, there's the typical post-recession surge in new businesses set up by people who lost their jobs, and “the obvious place to start your business nowadays is in a serviced office," said Mat Oakley, head of UK and European commercial research at Savills. There's also the considerable uncertainty around how existing businesses are going to return to the office, combined with employers who find they now need to satisfy their staff’s desire to “work in a more agile fashion,” he said.
Oakley said that while leasing volumes are still low, inquiries for serviced office space have been rising since the start of the year.
“There could be a reasonably optimistic story for serviced office providers going forward," he said.
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Kelvin Chan reported from London. Michelle Chapman reported from New Jersey.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
At the core of the ongoing government shutdown is a fight over the decision to end subsidies that let some 12 million Americans get health coverage.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
