The model was not a good fit for the pandemic – coworking spaces for businesses needing more room for employees – so it wasn’t surprising that WeWork lost some serious revenues.
That hasn’t stopped the company from going big and seeking an IPO via special purpose acquisition company (SPAC). How big? Shaquille O’Neal big.
The potential merger target is BowX Acquisition Corp., a SPAC that includes O’Neal among its advisors, a Financial Times report said, adding that BowX is a blank-check company that raised $420 million in August.
WeWork lost $3.2 billion in 2020, but the office-sharing startup is pushing forward.
With a big reduction in its ambition – it seeks a $9 billion valuation with debt, down significantly from $47 billion – WeWork is still eyeing the public offering.
The 2020 losses were down from $3.5 billion in 2019, according to the Financial Times.
The drop came despite WeWork cutting capital expenditures nearly 98%, from $2.2 billion in 2019 to only $49 million in 2020, as occupancy rates at its properties plummeted from 72% to 47%, according to the Times.
The original dream of a $47 billion evaluation was scuttled due to reports on the company’s shaky finances, conflicts of interest, criticism over its business model and the wild partying culture fueled by founder and then-CEO Adam Neumann.
According to the Times, WeWork is seeking $1 billion in new funding.
That number was revealed during a presentation shown to prospective investors as part of a pitch for the $1 billion and a stock market listing, a person familiar with the matter told Reuters.
WeWork‘s most recent projections 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.
WeWork declined to comment on the report.