WeWork, which has had one of the most spectacular IPO explosions in recent years, is trying to be revealed again – and some of the factors that worry regulators about the first transaction are back.
WeWork does not make an initial public offering this time, but merges with a special procurement company, or SPAC. Rules around SPACs are looser than for IPOs, giving WeWork more room to show its future.
The shared office provider is expected to merge with a SPAC called BowX Acquisition Corp later this year. As the two firms promoted the transaction to investors, they outlined an optimistic scenario for the growth and profitability of the firm.
BowX’s chairman described WeWork in a call with investors as a $ 5 billion revenue venture, though it’s a forecast rather than a current figure. In describing the size of WeWork, the company counted units that WeWork does not directly own.
WeWork predicts a rapid recovery from the downturn of the pandemic, which has hit its business particularly hard because few people use offices, much less shared space, and because it still had the hook for long-term leases. The company is also using a new profit measure that shows higher margins than it claimed in late 2019.