The new boss, Sandeep Mathrani, focuses on the core: flexible office space in popular locations.
(Photo: AP)
new York Actually, WeWork should have been on the stock exchange long ago. But the ambitious New York start-up’s plans failed in 2019 due to investor skepticism. The rating at the time was too high, the promises too airy – so the plans had to be cashed in.
Now it should work in the second attempt. WeWork will be listed on the New York Stock Exchange (NYSE) on Thursday, the company announced. The IPO takes place via a so-called Spac. These are shell companies that are already listed on the stock exchange and take over start-ups in order to bring them to the stock exchange – virtually through the back door. WeWork is taken over by Spac BowX for $ 1.3 billion. BowX shareholders approved the merger with the start-up on Tuesday.
WeWork has shrunk radically over the past two years. There is nothing left of the grandiose visions of the founder, Adam Neumann. In 2019, Neumann had emphasized in the stock exchange prospectus that he wanted to improve “the world’s awareness” and, in addition to expensive office properties, had also initiated a number of other projects, including a private school and the WeLive shared flat concept.
Neumann had to leave the company in autumn 2019 after various scandals. Now the experienced real estate manager Sandeep Mathrani is running the business and concentrating on the core: flexible office space in popular locations. “Regardless of how companies think about the future of work: Access to offices to work together, drive innovation, do mentoring and build a culture will remain important,” Mathrani recently emphasized.
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WeWorks is currently valued at $ 9 billion, a fraction of the $ 47 billion the startup was once valued at. The pandemic and the associated move to home office initially made the situation even more difficult.
However, the company now wants to benefit from the increasing demand for flexible offices. According to the company, sales have been increasing for five months in a row. At $ 228 million, September was the strongest month this year. 60 percent of the buildings are occupied, at the end of 2020 it was 47 percent.
WeWork aims to be profitable in early 2022
But WeWork continues to write losses. The total sales for the current year could also be lower than initially assumed. Accordingly, WeWork is still assuming 2.7 billion dollars for 2021, instead of the planned 3.2 billion, as reported by the Financial Times. The company aims to become profitable by the first quarter of 2022 and nearly triple sales to $ 6.8 billion by 2024.
Softbank has long been a major investor in WeWork. CEO Masa Son was considered a mentor to Adam Neumann, who is said to have always driven him to tackle bigger and crazier projects.
Financially, however, Neumann emerged as the winner from the failed IPO. A mandatory notification to the stock exchange regulator shows that Neumann received shares valued at around $ 245 million in May. That was part of one of his exit package that was supposed to settle a dispute between the WeWork founder and Softbank. In addition, there was almost $ 200 million in cash. Neumann was also able to refinance a $ 432 million loan on favorable terms and sell old WeWork shares valued at $ 578 million.
Neumann and Softbank had long argued about the details. Before Neumann withdrew two years ago, the parties had actually agreed even better conditions for the WeWork founder. At that time he held the majority of the voting rights and had his exit gilded.
Neumann now lives with his wife Rebekah and six children in his Hamptons estate in a posh beach town outside of New York. Rebekah was Chief Brand and Impact Officer at WeWork and is now working on a new project called SOLFL (pronounced Soulful) that deals with spirituality, according to an Instagram account. It is based on the former WeWork subsidiary WeGrow, a private school that she founded.
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