Two years after its initial attempt to go public, WeWork finished its first day as a listed company yesterday with its share price up 13.5%.
Listed on the New York Stock Exchange, WeWork – trading under the ticker WE – officially merged with BowX Acquisition Corp, a SPAC, earlier this week in a deal that valued the flex office provider at about $9bn.
The deal, which completed on Wednesday, gives WeWork about $1.3bn in cash through private investments and a facility provided by Cushman & Wakefield.
WeWork had a strong first day, its share price rising 13.5% to $11.78.
Prior to the merger, BowX Acquisition Corp had traded at about $10 per share since August – having previously risen to as high as $13.93 in the days after WeWork was announced as its target company in March 2021.
BowX Acquisition Corp’s former chairman and co-CEO, Vivek Ranadivé, said the company “can’t imagine a business better equipped to lead continued growth in the flexible space market” than WeWork.
In the last two years, new leadership at WeWork, appointed by major shareholder SoftBank, has tried to turn the operator around after the failed IPO attempt that led to the ousting of former CEO Adam Neumann in 2019.
At $9bn, the company is valued at a fraction of the $47bn valuation it secured at the height of its rapid expansion, which attracted huge investments from SoftBank and others.
Under new leadership, WeWork is taking an ever more “asset-light” approach by creating a workplace management platform, WeWork Workplace, and reducing the number of physical spaces in its portfolio.
The number of physical desks has fallen from one million to 930,000 since Q3 2020.
At the same time, membership has risen to 575,000 from a low of 490,000 at the end of 2020 – but still 17% below pre-pandemic highs.
However, the company still has work to do: global occupancy is 61%, while losses – though falling – are still high. In Q2 2021, WeWork reported a net loss of $923m against $593m of revenue.
Total turnover has since risen to an estimated $658m in Q3, but the company has not yet released full financial figures for the quarter, and so it is unclear how much WeWork’s losses have improved.
Sandeep Mathrani, CEO of WeWork, called the completion of the merger with BowX Acquisition Corp a “testament” to WeWork’s determination to transform its business and deliver options for shifting workplace demands.
He added: “As companies around the world reimagine their workplace, WeWork is uniquely positioned to offer the space and services that can power solutions built around flexibility. Providing employers and landlords around the world with our holistic offering of space-as-a-service, All Access and workplace management technology will enable WeWork to lead the market in mainstream adoption of flexible space.”