WeWork, which had one of the most spectacular IPO implosions in recent years, is trying to go public again – and some of the factors that worried regulators on the first deal are back.
WeWork is not doing an IPO this time, but is merging with a special takeover company, or SPAC. Rules around SPACs are looser than for IPOs, giving WeWork more leeway to promote its future.
The shared office provider is expected to merge with an SPAC called BowX Acquisition Corp. later this year. While the two entities brought the deal to the attention of investors, they outlined an optimistic scenario for the company’s growth and profitability.
The BowX chairman described WeWork in a conversation with investors as a $ 5 billion company, although that figure is a projection rather than an actual number. In describing the size of WeWork, the company counted units that WeWork does not directly own.
WeWork predicts a rapid recovery from the pandemic recession, which has hit its company particularly hard because few people used offices, let alone shared space, and because it was still on long-term leases. The company is also using a new earnings measure showing higher margins than claimed at the end of 2019.