Business

WeWork will be published through SPAC

Share We work At noon on Thursday, the company went public through a special-purpose acquisition company more than two years after the IPO failed, jumping to a high of 12%.

Inventory is currently increasing by more than 8%.

The office leasing company abandoned its IPO plan in 2019 after investors expressed concern about its business model and corporate governance, as well as its founder and then CEO Adam Neumann.

Plan of merger with BowX Acquisition Corp.. The deal, which reportedly valued the company for about $ 9 billion, was first announced in March.

Ratings have dropped sharply since 2019, when WeWork was Initially as high as $ 47 billion NS Softbank Group.. As the company’s financial news was unveiled and investor demand weakened, its reputation slowly declined.

“You said this was a drama story,” WeWork Chairman Marcelo Claure told CNBC’s “Squawk Box” Thursday. “Sure, this is the story of many writing a documentary that it’s the end of WeWork. Well, resistance, the tenacity of these people is incredible. This company is here and more than ever. Powerful and we will celebrate more milestones. “

What was wrong

WeWork’s troubles began in August 2019 when it was revealed in the company’s IPO filing. It was on track, losing $ 1.9 billion the previous year. Run out of the remaining cash. A devastating report from The Wall Street Journal in September raised concerns about how Neumann managed the company, Including the possibility of illegal activity..

Neuman Resigned CEO that month.. CNBC said he was in October Get up to $ 1.7 billion worth of packages and leave WeWork waives his voting rights. Real estate executive Sandeep Mathrani later took on the role of CEO.

“WeWork is a great brand, and if someone gives you a super brand to turn around, you’ll have to say yes,” Matrani told CNBC’s “Squawk Box.”

WeWork’s troubles continued even after the IPO failed. That November Reuters reports that the Attorney General of New York is investigating the companyIncludes whether Neumann engaged in concessions to enrich himself.

This included reports that Neumann had purchased the trademark for the word “We” and was planning to charge WeWork for $ 6 million to transfer it. A concession is someone acting in their best interests, not the client.

Bloomberg also reported that that month. WeWork faced oversight from the US Securities and Exchange Commission Disclosure to investors for a failed IPO.

The IPO failure and pandemic onslaught caused several layoffs in the company in late 2019 and 2020. WeWork also suffered significant losses as Covid-19 closed office spaces around the world.

Claire told Squawk Box that everyone has a “significant role to play” and Neumann deserves praise as a visionary person who came up with the idea.

Neuman congratulated the new leadership team on Thursday morning in an interview with the media at Standard’s outdoor beer garden, an expensive hotel in the Meatpacking District of New York City. “I couldn’t be happier anymore,” Neumann said, with him and co-founder Miguel McKelvey to celebrate the IPO.

“This has always been about what the team and we did together and we are very proud for today and for today,” he said.

Acquisition of Softbank

SoftBank made its first multi-billion dollar investment in WeWork through the $ 100 billion Vision Fund in 2017. The fund also funds Silicon Valley start-ups. Uber..Invested by a Japanese technology giant WeWork for a total of $ 18.5 billion By the time you reach a failed IPO.

In October 2019, SoftBank agreed to spend $ 10 billion on WeWork’s 80% stake. As part of the deal, SoftBank also said it would buy $ 3 billion in shares from investors and employees. But it denied those plans in April 2020, Partly due to a government survey of the company.

Softbank Gradually dropped its reputation WeWork will reach $ 7.3 billion at the end of December 2019 and $ 2.9 billion at the beginning of 2020.

In a earnings announcement later that year, Softbank CEO Masayoshi Son said he was “ridiculous” about his company. Billions of investments With WeWork.

“I’ve admitted that I’ve failed to invest in WeWork and have been stupid several times,” he said, according to a FactSet phone transcription.

Claire told CNBC’s “Squawk Box” that her son was “excited” to open the company.

“Two years ago, WeWork was worth zero, but the fact that we raised it from zero to $ 8 billion and $ 9 billion is amazing,” Claure said in the Squawk Box.

WeWork Comeback

Since then, the pandemic recovery has accelerated the demand for flexible workspaces as more workers move to hybrid or permanent remote work.

In March, WeWork agreed to a $ 9 billion SPAC merger with BowX Acquisition. This is a move completed on October 20th. As part of the transaction, SoftBank held a majority stake in the company, but agreed to a one-year lockup. According to those who are familiar with the issue, share, Reuters previously reported..

SPAC, also known as a blank check company, was founded solely for the purpose of raising funds through an IPO and using the funds to acquire an existing company.As celebrities like Shaquille O’Neal, they have skyrocketed in recent months Jump on the trend.Companies like Virgin Galactic When Lucid Motors I published it using SPAC, The structure is also scrutinized by the SEC..

BowX Acquisition raised $ 420 million when it was released in August 2020. WeWork is traded under the ticker we..

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WeWork will be published through SPAC

Source link WeWork will be published through SPAC

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