WeWork lost $3.2 billion last year. Now it wants to go public with a SPAC advised by Shaquille O’Neal

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WeWork lost $3.2 billion in 2020 as the pandemic forced its coworking spaces to shutter, down from $3.5 billion the year before, the Financial Times reported Monday.

Those losses came despite WeWork cutting its capital expenditures to just $49 million, down nearly 98% from $2.2 billion in 2019, as occupancy rates at its properties plummeted from 72% to 47%, according to the Times.

But WeWork is still eyeing a public offering, now through a potential merger with BowX, a special purpose acquisition company (SPAC), which counts former NBA star Shaquille O’Neal among its advisors, the report said.

WeWork declined to comment.

According to the Times, WeWork is seeking $1 billion in new funding, and hopes to go public at a valuation of $9 billion, including debt. The Wall Street Journal previously reported in January that WeWork was eying a deal with the SPAC that would value it at $10 billion.

The new valuation would be less than a fifth of the $47 billion WeWork sought when it initially announced its plans for an initial public offering in 2019. Those dreams were shattered amid revelations about the company’s shaky finances, conflicts of interest, and the wild partying culture fueled by founder and then-CEO Adam Neumann.

But one investor pitched by WeWork doubted its most recent projections, which included revenues of $7 billion by 2024, adjusted earnings of $485 million next year, and 90% occupancy rates by the end of 2022, according to the Financial Times.

Since its downfall, WeWork has been mired in legal and financial trouble. SoftBank, the company’s largest stakeholder, injected billions of additional funding into the company to help keep it afloat even as other investors sought to back out.

Neumann, after stepping down as CEO, also sued SoftBank for backing out of buying nearly $1 billion of his WeWork shares. As part of a proposed settlement, Neumann will get a $50 million payout on top of $500 million from SoftBank for buying his shares, and will leave WeWork’s board for a year, Bloomberg reported last month, helping open the door for a public offering.

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WeWork eyeing public SPAC debut in deal that could be worth $10 billion, report says

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A man walks past the logo of WeWork in Tokyo on May 18, 2020.

  • WeWork has its eye on going public via a SPAC merger, The Wall Street Journal reported on Thursday.
  • The office-sharing company could seek a valuation of up to $10 billion, according to the report.
  • WeWork had a peak valuation of $47 billion in 2019 following a funding round led by SoftBank. 
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WeWork could be taking its second shot at trying to go public, according to a report from The Wall Street Journal on Thursday.

The office-sharing company, which tried but ultimately failed in its attempt to go public at a valuation of around $48 billion in 2019, is in talks to combine with a SPAC, the report said, citing people familiar with the matter.

A deal could value WeWork at $10 billion, which would be a dramatic fall from its peak valuation of $47 billion in 2019 when SoftBank led a funding round.

SoftBank remains a majority owner of WeWork, and the Japanese conglomerate marked down its valuation for the company to $2.9 billion amid the COVID-19 pandemic last Spring. 

While SoftBank has been weighing offers from a SPAC affiliated with Bow Capital Management LLC, it has also received separate offers for a new private investment round that it is considering, according to the report. 

Proceeds raised from either potential deal would be used to fund growth initiatives, the report said. 

There is no guarantee that WeWork will strike any deal, and the talks are complicated, the people said.

The company has been working to clean up its image after extravagant spending by its former CEO and co-founder Adam Neumann tanked its planned public debut more than a year ago. 

SPACs have been all the rage over the past year as companies look for a faster and cheaper route to go public relative to the traditional IPO. Nearly $75 billion was raised by 219 SPAC IPOs in 2020, and 2021 has been off to a strong start as well, with more than 80 SPAC debuts so far this month, according to data from SPACInsider. 

Read more: GOLDMAN SACHS: These 22 stocks still haven’t recovered to pre-pandemic levels – and are set to explode amid higher earnings in 2021 as the economy recovers

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