WeWork, which has one of the most spectacular IPOs in recent years, is trying to make a public offering again – and some of the factors that worry managers about the first deal are coming back. .
WeWork this time does not conduct an initial public offering but rather consolidates with a special purpose acquisition company, or SPAC. The rules around SPAC are looser than IPOs, giving WeWork more time to welcome its future.
The shared office provider is expected to merge with an SPAC called BowX Acquisition Corp.
later this year. When the two units promoted the deal with investors, they drew an optimistic outlook for the growth and profitability of the company.
The BowX president described WeWork in a call to investors as a company with $ 5 billion in revenue, even though that figure is a prediction, not the current figure. When describing the size of WeWork, the company counted units that WeWork does not directly own.
WeWork is anticipating a rapid recovery from the pandemic recession, which has been particularly severe in their business since fewer people use the office, much less shared space, and as it is. Long-term lease. The company is also using a new profit metric that shows higher margins than announced at the end of 2019.
Before the IPO, the Securities and Exchange Commission asked WeWork to change certain growth and profit measures it is using. Minor Myers, a professor of law at the University of Connecticut, who specializes in corporate finance, said: “The SEC can roll back the troubles again,” he said, unless WeWork denies these claims in the filing. official with regulatory agencies, scheduled later this month.
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