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WeWork may go public via SPAC; deal could be worth $10 billion: WSJ report

WeWork may go public via SPAC; deal could be worth $10 billion: WSJ report

WeWork may go public via SPAC; deal could be worth $10 billion: WSJ report
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By StoryTailors Jan 29, 2021 11:56:20 AM IST (Published)

WeWork, the co-working giant, may soon become a publicly-traded company by merging with a special-purpose acquisition company (SPAC), stated a report in The Wall Street Journal (WSJ).

WeWork, the co-working giant, may soon become a publicly-traded company by merging with a special-purpose acquisition company (SPAC), stated a report in The Wall Street Journal (WSJ).

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This is the company’s second shot at trying to go public after its first attempt at a public offering blew up in late 2019, after scrutiny of its financials and governance.
Citing people familiar with the matter, the report stated that the office-sharing company was in talks to combine with a SPAC. The talks, according to WSJ, were “complicated and there is no guarantee WeWork will end up striking any deal soon”.
The WSJ report says that the New York-based outfit and “its Chief Executive Sandeep Mathrani have been weighing offers from a SPAC affiliated with Bow Capital Management LLC and at least one other unidentified acquisition vehicle for several weeks” in a deal that could value WeWork at around $10 billion.
However, the $10 billion deal for WeWork would be a dramatic fall from its peak valuation of $47 billion in 2019, when SoftBank — a majority owner of WeWork — led the funding. Post that, WeWork’s bungled IPO and the ouster of co-founder Adam Neumann drove that figure down to $4.9 billion. Extravagant spending by Neumann had tanked WeWork’s planned IPO debut in 2019, which made WeWork’s board elbow him out of the company.
To keep insolvency at bay, SoftBank came up with a $9.5-billion bailout plan and appointed Sandeep Mathrani, a real estate veteran, as WeWork’s CEO to clean up the company’s image and steady the ship. Since then, WeWork has cut its workforce by one-third, saving $1 billion annually. It also shut centres that are underperforming.
However, in November 2020, the company said it had used up $1.7 billion since the beginning of the year, and also its revenue dropped 8 percent in the Q3.
In October 2020, Mathrani had stated that the company was on track to be profitable in 2021 and would consider an IPO.
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