If you don’t succeed at first, try again. That’s the story of WeWork as it’s looking to go public again, this time it looks like it’s sure to work out.
The tech real estate company that essentially leases office real estate, makes it look cool and then subleases that property to companies and individuals looking to rent for the short term.
This time instead of trying a traditional IPO again, the company is using a different financial manoeuvre: merging with a special purpose acquisition company (SPAC).
Now Wework is valued at $9 billion, a sharp drop from the $47 billion it was valued at in 2019 before things went downhill.
Wait what are SPACs?
SPACs are shell companies that go public with the express purpose of raising money to buy private companies — effectively bringing private companies public much faster than if they were to do a traditional IPO.
To be successful, a SPAC needs to merge with a private company within two years or return investors’ money. A share of a SPAC typically costs $10, and buyers are allowed to get their money back if they don’t like the eventual merger, as per Vox.
Looking ahead: WeWork currently has 851 locations in 152 cities, totalling more than one million workstations with enterprise companies making up more than 50% of memberships. Although it lost $3.2 billion last year, compared to $3.5 billion in 2019 it’s confident it can turn its fortune around in the next few years.
Dig Deeper: Read Wework’s pitch to Investors [Pdf]