WeWork eventually gained a listing on the New York Stock Exchange in October 2021, via a SPAC (special purpose acquisition company) merger, bypassing the traditional listing process. It was valued at some US$9 billion. Despite shedding many of its past excesses and restructuring some debts into equity, the company struggled to turn a profit. Last month, WeWork warned that it might be on the verge of bankruptcy as it continued to burn through rapidly falling cash reserves. Its market value has fallen below US$100 million and it must now implement a 40-to-1 share consolidation to prevent de-listing.
How far and fast the mighty has fallen. Barely four years ago, coworking space provider WeWork was one of the most valuable and exciting unicorns in the world. In January 2019, SoftBank valued the start-up at US$47 billion, when it invested an additional US$2 billion in the company, on top of the US$8.4 billion it had previously invested. Ahead of its much-hyped initial public offering (IPO), the analyst community talked up WeWork’s growth potential — Goldman Sachs projected it would be worth US$65 billion post-listing. The IPO prospectus was filed in August 2019 — and then it all started to fall apart. Valuations plummeted, falling to as low as US$10 billion, as market watchers/investors pored over its financials, business model and corporate governance. Just days before its target listing date in late September, the IPO was abruptly called off.
A change in leadership ensued — controversial founder and CEO Adam Neumann stepped down. The company went on a cost-cutting spree, which included massive layoffs, divestment of non-core businesses and renegotiation/termination of some of its long-term leases. It also secured a reported US$9.5 billion rescue package from SoftBank.
