The shared-workspace company that once sought to “elevate the world’s consciousness” has finally made its public debut.
Having suffered a complete collapse two years ago and aborting a planned IPO, how solid is WeWork (NYSE: WE) now?
What investors need to know about WeWork
It was far from a straightforward journey for WeWork to go public, having finally done so via a reverse merger with BowX Acquisition Corp, a special purpose acquisition company — or SPAC.
Valued at $47 billion in 2019, WeWork was lucky to get out the door yesterday with an estimated value of $9.34 billion after closing at $11.78 per share yesterday. Back in 2019, it was hemorrhaging money, scandal surrounded its founder, Adam Neumann, and after being bailed out by SoftBank, its value plummeted to $2.9 billion.
However, it’s been clawing its way back ever since, and according to Neumann’s replacement as CEO, Sandeep Mathrani:
“WeWork has spent the past year transforming the business and refocusing its core, while simultaneously managing and innovating through a historic downturn. As a result, WeWork has emerged as the global leader in flexible space with a value proposition that is stronger than ever.”
Its preliminary Q3 results aren’t too shabby either:
- Revenue jumped 10% from Q2 to $658 million.
- Total occupancy of owned spaces rose from 52% to 80%.
- Its new, subscription-based product has also risen to 32,000 customers in Q3 since launching in March.
However, a black cloud in the form of massive losses still overshadows the company, amounting to $3.2 billion in 2020. It’s possible that the ‘new normal’ of post-COVID office reality could be a good thing for WeWork as businesses opt for more flexibility rather than owned spaces. However, this is still far from a risk-free business, and investors should wait and see how WeWork performs in the coming quarters before considering an investment.
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Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.