WeWork will begin trading on the New York Stock Exchange Thursday following a $9 billion ‘blank check’ deal with BowX Acquisition, marking the final stage in one of the more high-profile and tumultuous roads a U.S. company has taken to going public.
The shareholders of BowX Acquisition, a listed special purpose acquisition company, or SPAC, on Tuesday voted in favor of the deal with WeWork, enabling the shared-office-space provider to trade on the New York Stock Exchange.
The company will trade under the ticker WE.
WeWork’s journey to going public marks a relatively muted end to one of the more high-profile and eyebrow-raising listings seen on Wall Street. The company hit the proverbial road in 2019, looking to raise $47 billion and follow in the footsteps of other successful high-profile IPOs.
WeWork's financial outlook immediately raised eyebrows, however. Though the company intended to expand into other areas such as education, its core business of selling memberships to its co-working spaces as well as founder and CEO Adam Neumann’s penchant for spending on lavish trips and real estate and his tastes for partying and marijuana ultimately forced the company to shelve its plans.
Neumann was ousted in 2019 and replaced by real estate veteran Sandeep Mathrani. Since that time, the company has sought to reassure investors that it has moderated some of the excesses that came under scrutiny during its previous listing attempt.
While the company has cut back on costs, slashed the number of office locations and focused on its core business, it is still losing billions. WeWork revealed to investors that it had lost $3.2 billion in 2020, despite trimming capital expenditures to $49 million after spending $2.2 billion in 2019.
WeWork will have $1.3 billion to work with from its deal with BowX. That includes money held in the SPAC trust from BowX’s own IPO as well as a $150 million investment from Cushman & Wakefield that acts as a backstop to shareholder redemptions.
Other investors including Starwood Capital Group, Insight Partners and BlackRock (BLK) - Get Free Report have committed an additional $800 million through a private investment in public equity arrangement.
SoftBank, which helped WeWork avoid bankruptcy with a multibillion-dollar rescue financing, has provided WeWork with a $550 million senior secured note.