WeWork has agreed to go public through a merger with blank-check firm BowX Acqui\u00adsi\u00adtion Corp in a deal that values the office-sharing startup at $9 billion inclu\u00adding debt.<\/p>\n
It marks a steep drop from the $47 billion that WeWork was valued for a listing in 2019, ahead of a botched listing plan that implo\u00added due to inves\u00adtor concerns over its busi\u00adness model and its foun\u00adder Adam Neuman\u00adn\u2019s manage\u00adment style.<\/p>\n
Even though WeWork has long lost billi\u00adons of dollars, it always found ways to attract huge invest\u00adments from deep-pocke\u00adted inves\u00adtors. Now, less than two years after it was rescued from a collapse, the co-working company has found yet another backer willing to over\u00adlook its losses. The company announ\u00adced on Friday that it had agreed to merge with a blank-check firm in a deal that would give it a listing on the stock market it was denied when it was forced to shelve an initial public offe\u00adring as inves\u00adtors ques\u00adtio\u00adned its finan\u00adcial strength and dubious gover\u00adnance practices.<\/p>\n
Instead of a tradi\u00adtio\u00adnal I.P.O., WeWork is merging with BowX Acqui\u00adsi\u00adtion, a company listed on the stock exch\u00adange for the sole purpose of buying a busi\u00adness, in a type of deal that has become hugely popu\u00adlar in recent months. Inves\u00adtors, bankers, and even cele\u00adbri\u00adties and athle\u00adtes have rushed to float such special purpose acqui\u00adsi\u00adtion compa\u00adnies, or SPACs<\/strong>, because they offer their crea\u00adtors a chance to mint huge profits rela\u00adtively quickly. And merging with these vehic\u00adles is attrac\u00adtive to compa\u00adnies like WeWork because they provide an express lane onto the stock market without the obsta\u00adcles that scuttled WeWor\u00adk\u2019s public offe\u00adring in Septem\u00adber 2019.<\/p>\n A SPAC is a shell firm that uses proceeds from a public listing to buy a private firm and WeWork is the latest in a slew of high-profile compa\u00adnies that have taken this route to the markets.<\/p>\n \u201cThere have been doubts raised about its busi\u00adness model, and those doubts may be diffi\u00adcult to address in an I.P.O. road\u00adshow,\u201d said Michael Klaus\u00adner, a Stan\u00adford busi\u00adness profes\u00adsor, refer\u00adring to the presen\u00adta\u00adti\u00adons that compa\u00adnies give to mutual funds, pension mangers and other insti\u00adtu\u00adtio\u00adnal inves\u00adtors before a public offe\u00adring. SPACs are \u201chighly proble\u00adma\u00adtic\u201d because their struc\u00adture can encou\u00adrage buyers to over\u00adpay, hurting share\u00adhol\u00adders in return, he said.<\/p>\n In 2021 only, 295 SPACs had gone public (USA, source New York Times), raising $93 billion and brea\u00adking last year\u2019s record in a matter of months. Because so many of these compa\u00adnies are now out there, some have tried to use star power to get busi\u00adnesses to enter\u00adtain their merger offers.<\/p>\n WeWork said the deal with BowX gave it an equity value of $7.9 billion, far less than the nearly USD 50 billion value that its inves\u00adtors placed on the company in 2019. WeWork will receive $1.3 billion in cash from the deal, inclu\u00adding $800 million from Insight Part\u00adners, Star\u00adwood Capi\u00adtal Group, Black\u00adRock and other investors.<\/p>\n WeWork will fetch $1.3 billion in cash from the latest deal, inclu\u00adding $800 million in private invest\u00adment from Insight Part\u00adners, funds mana\u00adged by Star\u00adwood Capi\u00adtal, Fide\u00adlity Manage\u00adment and others.<\/p>\n","protected":false},"excerpt":{"rendered":" WeWork has agreed to go public through a merger with blank-check firm BowX Acqui\u00adsi\u00adtion Corp in a deal that values the office-sharing startup at $9 billion inclu\u00adding debt. It marks a steep drop from the $47 billion that WeWork was valued for a listing in 2019, ahead of a botched listing plan that implo\u00added due to [\u2026]<\/p>\n","protected":false},"author":2,"featured_media":37092,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"wp_typography_post_enhancements_disabled":false,"footnotes":""},"categories":[886,1364,1366,1369,1372],"tags":[],"class_list":["post-43470","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general-en","category-featured-en","category-news-en","category-investors","category-consultant","news-category-deals-news-en"],"yoast_head":"\n