WeWork plans to go public with a Special Purpose Acquisition Company
Special Purpose Acquisition Company: In 2020, WeWork had lost nearly $3.20 billion as the pandemic forced to shutter down its coworking space. It was down from $3.50 billion a year before. As of the source, WeWork cutting its capital expenditures to $49 million. However, it downs nearly 98% from $2.20 billion in 2019, as occupancy rates at its properties plummeted from 72% to 47%.
However, still, WeWork remains looking for a public offering. As of the source, it plans to go public through a potential merger with BowX. It a special purpose acquisition company. The firm has tallies former NBA star Shaquille O’Neal within its advisors. As per the source, the US-based commercial real estate firm is looking for $1 billion in new funding. It hopes to go public at a valuation of $9 billion, including debt.
In January, WeWork was contemplating a deal with the SPAC that would value it at $10 billion. The new valuation would be less than a 5th of the $47 billion WeWork sought. Initially, it announced its plans for an IPO in 2019.
Although, one investor threw by WeWork denied its most recent projections, which included revenues of $7 billion by 2024, adjusted earnings of $485 million in next year. Moreover, 90% of occupancy rates by the end of 2022.
According to the news, the commercial real estate firm has been faced with legal and financial trouble when its business falls down. Softbank remains the largest stakeholder of WeWork. It has injected billions of additional funding into the firm to help it afloat ever as other investors sought to back out.