By: Hadassa Kalatizadeh
Where there’s a will, there’s a way.
WeWork has gone public after all. Two years after the office-sharing giant’s notorious failed Initial Public Offering, on Thursday the company successfully became a publicly traded company. The company did so through a merger with a special-purpose acquisition company, namely BowX Acquisition Corp. As reported by the Wall Street Journal, shares rose on their first day of trading on the NY Stock Exchange, closing at $11.78, with a 13.5% gain.
In 2019, the company had suffered a humbling botched IPO, which resulted in the ousting of its co-founder and chief executive, Adam Neumann. The company’s roughly $47 billion valuation was questioned as well as its spending tactics. Incoming Chief Executive Sandeep Mathrani had slashed thousands of jobs, closed locations, renegotiated leases and kept a low profile during the Covid-19 pandemic.
This year, WeWork was given a roughly $8 billion equity valuation in its transaction with BowX Acquisition. In the deal, WeWork got cash proceeds of about $1.3 billion, the companies said. SPACs have gained popularity as an easier alternative than IPOS in going public because they are less regulated. The blank-check companies raise money with the purpose of seeking a target to merge with and take public. This year share prices for listed SPACs have taken a hit, with many of the companies now trading below their debut prices. WeWork is hoping it will have better luck.
SoftBank Group Corp., the Japanese tech giant led by billionaire Masayoshi Son, had poured money into WeWork, and rescued the company from collapse in 2019. It continues to be a majority stakeholder in WeWork, even after the SPAC deal. Also Mr. Neumann will still have voting power of about 11% after the deal, as per a securities filing.
In a recent slideshow for investors, WeWork noted case studies of how firms could cut their real-estate costs by roughly 25% per employee by switching to WeWork shared spaces. “As companies around the world reimagine their workplace, WeWork is uniquely positioned,” said Mr. Mathrani before the company went public. On Thursday, on a televised speech the CEO said that WeWork expects to be profitable in 2022, after having corrected its cost structure during the pandemic. Mr. Mathrani and Executive Chairman Marcelo Claure, who is also the chief operating officer of SoftBank Group, will continue to lead WeWork, the company said.