WeWork, which has 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 in the first deal have returned.
WeWork does not make an initial public offering this time, but merges with a special purpose procurement company or SPAC. SPAC rules are weaker than IPOs, giving WeWork more freedom to promote its future.
The shared office provider is expected to merge with a SPAC called BowX Acquisition Corp. later this year. As the two entities promoted the transaction to investors, they created an optimistic scenario for the company’s growth and profitability.
President BowX described WeWork in an appeal to investors as a $ 5 billion-dollar company, although that figure is more of a projection than a current number. When 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 hit its business particularly hard because few people used offices, much less common space, and because it was still on the hook for long-term rentals. The company is also using a new profit measure, which has higher margins than it claimed at the end of 2019.