WeWork attempts 2nd try at going public

After a year in which a global pandemic turned offices across the world into ghost towns, WeWork, the embattled communal office-space company, is making a second attempt at going public.

The announcement Friday comes almost two years after WeWork’s first attempt at becoming a publicly traded company blew up in spectacular fashion, its founder and CEO ousted abruptly.

This time the New York company becomes part of the SPAC wave and will seek a listing after merging with the special-purpose acquisition company BowX Acquisition.

The agreement values WeWork at $9 billion plus debt, far below the $47 billion valuation given the venture in September 2019 when the IPO imploded after massive losses were revealed in regulatory filings.

WeWork said it would also raise $1.3 billion.

The deal with BowX provides a lifeline to WeWork. Armed with cash raised from investors, SPACs look for privately held companies to buy so that the company can easily list its stock on an exchange. And the volume of companies going public through SPACS has exploded.

Last year, SPACs raised $83.4 billion, more than six times the prior year. They surpassed that level in less than three months this year.

WeWork said during a call with industry analysts Friday that it anticipates strong growth as the economy recovers. The company is forecasting 1.5 million total memberships at some point in 2024. That compares with 2020’s 476,000 memberships. Revenue, excluding China, is predicted to climb to $7 billion, more than double last year.

WeWork leases buildings and divides them into office spaces to sublet to members, which include small businesses, startups and freelancers who want to avoid laying out funds for permanent office space. The company’s operating expenses were exorbitant and it became reliant on repeated cash infusions from investors.