WeWork Goes Public On New York Stock Exchange
USA – Following a report in March that WeWork plans to go public via a merger with special-purpose acquisition company BowX Acquisition SPAC, the coworking space operator has successfully completed the move on Thursday, reported The New York Times on Friday morning (22 October, SGT).
The merged publicly-traded company is now known as WeWork Inc and has started trading on the New York Stock Exchange (NYSE) under the ticker symbol WE on Thursday.
At WeWork’s closing share price on Thursday of US$11.78, the coworking space operator is valued at approximately about US$9.5 billion, which is a far cry from its the US$47 billion valuation prior to its failed initial public offering (IPO) in 2019.
The merger with the aforementioned special-purpose acquisition company (SPAC) gives WeWork the previously announced gross cash proceeds of roughly US$1.3 billion prior to expenses. These include stakes held by investment firms Fidelity and BlackRock, a fully committed PIPE (private investment in public equity), cash held in a trust account, and an equity backstop facility provided by Cushman & Wakefield (C&W).
WeWork Inc will continue to be led by Chief Executive Officer Sandeep Mathrani and Executive Chairman Marcelo Claure.
Notably, the company provides coworking space to clients like start-ups, and freelancers as well as small and large businesses. It is counting on the thesis that customers would be attracted to flexible workspace as compared to a traditional office lease, which has longer lease tenures and have other burdensome conditions.
However, the COVID-19 pandemic has also impacted WeWork’s business. While traditional office landlords managed to survived as occupants are contractually obligated to keep paying their leases, the coworking space operator’s customers were able to walk away from their much shorter-term deals.