WeWork reports losses of nearly $ 2.1 billion prior to its stock market debut

A man passing the WeWork logo in Tokyo on May 18, 2020.

A man passing the WeWork logo in Tokyo on May 18, 2020.

Office-sharing startup WeWork lost $ 2.06 billion (£ 1.45 billion) quarterly after being hit hard by Covid-19.

This announcement will be made as WeWork prepares for its debut on the stock market.

The company’s first public attempt collapsed in 2019 due to concerns about its business model and co-founder Adam Neumann’s leadership style.

Since Neumann’s departure, the company has experienced significant headcount reductions and large headcount reductions that have experienced the sale of its business.

Businesses were particularly strongly affected by the pandemic as social distance rules caused a surge in teleworkers and workers avoided shared office spaces due to concerns about infection.

According to WeWork, backed by Japanese tech giant Softbank, first-quarter revenues were nearly halved from a year ago to $ 598 million.

However, the company said people are now back in the office as the coronavirus restrictions have been relaxed.

Its share has increased by up to 50% in the last quarter, compared to 47% in the last three months.

The company also said it expects changing working habits to increase demand for the types of short-term leases it offers.

Stock market planning

In March, WeWork announced that its shares would finally begin trading on the stock market through an acquisition by the listed BowX Acquisition Corp.

BowX is a so-called special-purpose acquisition company, a shell company that uses the proceeds from its listing to buy a privately held company.

The company is headed by the owner of the NBA’s Sacramento Kings and is affiliated with the legendary basketball player Shaquille O’Neal.

The deal valued WeWork at $ 9 billion. This is about one-fifth of the estimated value of 2019 before the previous levitation efforts collapsed brilliantly.

Investors asked about the company’s finances and how the business was managed by its founder, Adam Neumann, who subsequently left the company.

After the plans to list the company were shelved, WeWork restructured its business.

It has closed about 100 locations that have withdrawn from non-core ventures, such as dog walk apps and wave pool makers, and now accounts for only one-third of its employees in mid-2019.

The company said it had incurred $ 494 million in restructuring costs, including a settlement with Mr Neumann. Withdrawal from some real estate incurred $ 299 million in impairment costs.

In February, WeWork backers SoftBank and Neumann reached a settlement to end the court battle that began in 2019.

Posted on