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Following its 2019 IPO fiasco and a series of scandals, WeWork yesterday began trading on the New York Stock Exchange under the symbol “WE”. Shares of WeWork Shares closed 13.5% higher at $ 11.78 on Thursday, according to the Wall Street Journal.
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The flexible space provider company went public through a combination with BowX Acquisition Corp., a special purpose acquisition company (SPAC), according to an announcement.
The business combination, which closed on Oct. 20, provides WeWork with previously announced gross cash proceeds of about $ 1.3 billion, before expenses, according to the announcement.
âToday is a testament to our company’s determination not only to transform our business, but also to adapt and deliver the options demanded by today’s workforce. As businesses around the world reinvent their workplace, WeWork is uniquely positioned to deliver the space and services that can fuel solutions built around flexibility, âsaid Sandeep Mathrani, CEO of WeWork, in the release. .
“Providing employers and homeowners around the world with our comprehensive offering of space as a service, unrestricted access and workplace management technology will enable WeWork to lead the market for widespread adoption of flexible spaces.” . “
In 2019, WeWork’s IPO collapsed as the company faced questions about its corporate governance and value and then CEO Adam Newmann, according to the Wall Street Journal. Neumann resigned shortly after. The company’s new CEO Mathrani has since closed locations, renegotiated leases and cut thousands of jobs to cut spending during the COVID-19 pandemic, according to the WSJ.
Jonathan Anastas, president of Alpha Tech, told GOBankingRates that 2021 has become the year when companies that previously could not go public managed to do so.
âAnd, often, with less attractive profit and loss positions than in the pre-COVID days when the public markets rejected the offer. WeWork, Soho House, WME and others, âhe says. âRising inflation has raised risk tolerances, so investors can be net positive after inflationary returns. Possible increases in future capital gains tax rates have pushed transactions forward. And – potentially the most frightening of all – COVID has enabled some âpandemic understandingâ for losses and depletion rates that in fact reflect systemic business issues greater than the COVID forgiveness warrants. “
He adds that ânew tax instruments, SPACs, direct offers and the like have given a wider range of options to businesses looking for a quick exit. The big questions will all be answered at the first sign of an economic downturn. “
Plans to merge with BowX Acquisition Corp. were first announced in March, in a deal that would have valued the company at around $ 9 billion, CNBC reports. This is a steep drop from 2019, when WeWork was initially valued at $ 47 billion by SoftBank Group. Its valuation slowly declined as news of the company’s finances collapsed and investor demand declined.
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The company said preliminary total third-quarter 2021 revenue was $ 658 million, an increase of about 10% from second-quarter 2021 revenue of $ 593 million. Across consolidated operations, the total occupancy rate continued to increase to 60% at the end of the third quarter of 2021, from 52% at the end of the second quarter of 2021, according to the announcement.
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