WeWork imploded, scrambled and goes public on Thursday

Asia's Tech News Daily

WeWork imploded, scrambled and goes public on Thursday

So it still happens. The American office rental company WeWork will be listed on Wall Street on Thursday, two years after an IPO that was canceled at the last minute.

This is done via a spac construction, whereby WeWork is merged into BowX, an empty exchange fund. The deal values ​​WeWork at $9 billion (7.7 billion euros), including debt.

Two years ago, no one gave a dime for WeWork. At the time, it was valued at $47 billion, making WeWork one of the highest-rated start-ups in the world. The lessor of workplaces in trendy city offices, including in Amsterdam, was forced to cancel its IPO in September 2019. This happened after it was revealed that founder Adam Neumann had made a mess of the company he founded in 2010.

Neumann flew an ultra-luxurious Gulfstream G650 ($60 million) at the company’s expense, took over businesses with WeWork money that matched his hobbies (surfing, superfoods and psychedelic drugs) and left a business that was losing $200,000 an hour at its all-time low. In Neumann’s vision, the company – which he renamed ‘The We Company’ – had to become a community where people without permanent jobs could work and live together. This included workplaces (WeWork), but also schools (WeGrow) and residential complexes (WeLive).

Investors were so nervous about the S1 – the document with all the company details that the SEC demands for an IPO – that major investor Softbank torpedoed the plans at the last minute. WeWork lost $40 billion in value within two weeks and laid off more than 2,000 employees. Adam Neumann had to leave his company under pressure.

It was a wake-up call for start-up financiers, looking for ‘winners’ who grow as fast as possible to eventually become the largest in their market. After the WeWork soap opera, profitability seemed just as important as growth, but now everything seems back to normal. See also the billions invested by investors in the latest hype: loss-making grocery delivery companies like the German Gorillas – which is regularly compared with WeWork.

Read more about Gorillas: ‘Growing pains of a flash delivery man who has come out of the ground’

For Softbank, the failed IPO meant billions went up in smoke. The Japanese investor wrote off nearly half of the $10 billion it had put into WeWork in November 2019, and CEO Masayoshi Son went through the dust in front of his investors. “I overestimated the value of WeWork,” he said. “I learned a hard lesson.”

A passionate artist

Son, who considered Neumann a son and described him as a “passionate artist,” later said he had been misled by the WeWork founder. The tech investor became enchanted by the charms of Neumann, an energetic, charismatic entrepreneur with long hair who walked around the office barefoot. Son, who invests based on intuition, saw in Neumann the same “twinkle” that he observed in Alibaba founder Jack Ma in 2000. The investment in this Chinese online store made Softbank the world’s wealthiest tech investor.

After the stock market flop, Softbank was determined to make WeWork profitable, in order to recoup some of its investment. It was time to turn green apples into red ones, said Son, who often uses imagery in his presentations. To expedite the maturing process, Son put veteran real estate manager Sandeep Mathrani in charge of WeWork to put things in order.

The We Company changed its name back to WeWork, discontinued all non-office rentals, slowed its expansion rate and closed loss-making facilities. The company fired even more people: of the 14,000 employees in 2019, WeWork now has about 4,000 left.

Hard hit by pandemic

The coronavirus hit WeWork and the restructuring hard. The ‘occupancy rate’ of the rental offices fell sharply (to 60 percent), because the one and a half meter measures allowed fewer customers. Last year, despite all kinds of cost savings, WeWork lost more than $3 billion. Now it hopes that after the pandemic, companies will close their own offices and subscribe to flexible workspaces – such as the one at WeWork.

That still seems far away. WeWork’s forecasted revenue of $3.2 billion this year is in danger of not being met. And the losses are still significant: WeWork was already more than $2 billion short in the first quarter of this year. Founder Neumann once again had a hand in this: after a lengthy legal procedure, he received 500 million dollars from Softbank for his shares.

A version of this article also appeared in NRC in the morning of October 21, 2021

WeWork imploded, scrambled and goes public on Thursday
Source link WeWork imploded, scrambled and goes public on Thursday

Internet Explorer Channel Network
Asia's Tech News Daily
News Related

OTHER NEWS

Teacher and civil servant can whistle for indexation again

Although pension funds across the board have been in better shape in the past six months, this is still insufficient for ABP, the largest fund in the Netherlands. The pension ... Read more »

Bloomberg: the Bijenkorf comes into Thai hands

Photo: ANP De Bijenkorf, together with other department stores from the British Selfridges Group, will be in Thai hands. An insider confirms this to Bloomberg news agency after reports in ... Read more »

Bharat Dynamics sign Rs 471.41-crore contract with Indian Army

Representative image (Image: Reuters) Bharat Dynamics Limited (BDL) on December 2 said it had signed a Rs 471.41-crore contract with the Indian Army for the refurbishment of IGLA-1M missiles. The ... Read more »

Largest pension fund in the Netherlands leaves premium unchanged

Photo: ANP People and companies affiliated with the ABP pension fund will no longer have to pay contributions next year. But an increase in pensions is not in it. The ... Read more »

Billionaire family hands Bijenkorf to Thai retail giant Financial

The Canadian billionaire family Weston has long wanted to get rid of the retail business and is said to have reached an agreement with the Thai conglomerate Central Group. In ... Read more »

IKEA Worli City Store spread across 80,000 sq ft to open in Worli on December 9

Consumers will be able to shop the entire IKEA range based on a well-integrated digital and physical shopping experience, the company said in a statement. Swedish home furnishings retailer IKEA, ... Read more »

Rising demand for convenience food boosts value addition in Indian seafood exports

Representative image Indian seafood exporters are churning out more value-added products to cater to the rising demand for convenience foods in overseas markets, particularly the US, after the outbreak of ... Read more »

PhonePe starts Rs 999 health insurance aimed at young first-time buyers

Digital payments and financial services company PhonePe said on December 2 that it has introduced a new health insurance plan that starts at Rs 999 to cater to young first-time health ... Read more »

MYRE Capital helps investors to acquire Rs 31 crore office space in Mumbai; its AUM crosses Rs 100 crore

Representative image MYRE Capital, which facilitates investors to have fractional ownership of commercial properties, has raised Rs 31 crore from high net-worth individuals for the purchase of nearly 18,000 square ... Read more »

Besi, ASML and ASMI at the bottom of the red AEX, Shell in the lead

The Dutch chip companies Besi, ASML and ASMI were hit hard on the Amsterdam stock exchange on Thursday. Investors were shocked by reports that the large American tech group Apple ... Read more »

Canara Bank raises Rs 1,500 crore via Basel-III compliant bond

State-owned Canara Bank on Thursday said it has raised Rs 1,500 crore by issuing Basel-III compliant bonds. “Our bank came out with issuance of Rs 1,500 crore of additional tier ... Read more »

Supermarkets: plastic food packaging still difficult to recycle

Photo: ANP Supermarkets are not yet meeting the industry targets for recycling plastic packaging. This is partly because this is technically difficult. As a result, only a small part of ... Read more »

No compensation for inflation at ABP

Participants of the ABP civil servants’ fund will not receive a higher supplementary pension next year to compensate for price increases, despite the rising inflation of currently more than 5 ... Read more »

Wealth First Po Standalone September 2021 Net Sales at Rs 7.59 crore, up 33.69% Y-o-Y

Reported Standalone quarterly numbers for Wealth First Portfolio Managers are: Net Sales at Rs 7.59 crore in September 2021 up 33.69% from Rs. 5.68 crore in September 2020. Quarterly Net ... Read more »

Shrenik Standalone September 2021 Net Sales at Rs 9.27 crore, down 94.74% Y-o-Y

Reported Standalone quarterly numbers for Shrenik are: Net Sales at Rs 9.27 crore in September 2021 down 94.74% from Rs. 176.16 crore in September 2020. Quarterly Net Loss at Rs. ... Read more »

Rocket Lab gives first look at plans for bigger, reusable Neutron rocket as it takes on SpaceX

Rocket Lab Rocket Lab on Thursday revealed more about the larger, more powerful Neutron rocket it is developing. “This is Neutron. It is an absolute beast,” Rocket Lab CEO Peter ... Read more »

Globe Textiles Standalone September 2021 Net Sales at Rs 84.60 crore, up 27.92% Y-o-Y

Reported Standalone quarterly numbers for Globe Textiles India are: Net Sales at Rs 84.60 crore in September 2021 up 27.92% from Rs. 66.14 crore in September 2020. Quarterly Net Profit ... Read more »

Libas Consumer Standalone September 2021 Net Sales at Rs 10.64 crore, up 12.6% Y-o-Y

Reported Standalone quarterly numbers for Libas Consumer Products are: Net Sales at Rs 10.64 crore in September 2021 up 12.6% from Rs. 9.45 crore in September 2020. Quarterly Net Profit ... Read more »

Bombay Super Standalone September 2021 Net Sales at Rs 17.18 crore, down 2.56% Y-o-Y

Reported Standalone quarterly numbers for Bombay Super Hybrid Seeds are: Net Sales at Rs 17.18 crore in September 2021 down 2.56% from Rs. 17.63 crore in September 2020. Quarterly Net ... Read more »

Mask Investment Standalone September 2021 Net Sales at Rs 0.02 crore, down 15.81% Y-o-Y

Reported Standalone quarterly numbers for Mask Investments are: Net Sales at Rs 0.02 crore in September 2021 down 15.81% from Rs. 0.03 crore in September 2020. Quarterly Net Profit at ... Read more »

Sundaram Standalone September 2021 Net Sales at Rs 27.47 crore, up 181.13% Y-o-Y

Reported Standalone quarterly numbers for Sundaram Finance Holdings are: Net Sales at Rs 27.47 crore in September 2021 up 181.13% from Rs. 9.77 crore in September 2020. Quarterly Net Profit ... Read more »

Libas Consumer Consolidated September 2021 Net Sales at Rs 19.70 crore, up 37.12% Y-o-Y

Reported Consolidated quarterly numbers for Libas Consumer Products are: Net Sales at Rs 19.70 crore in September 2021 up 37.12% from Rs. 14.37 crore in September 2020. Quarterly Net Profit ... Read more »

OPEC+ ministers discussing base plan of oil production recovery

OPEC+ member-states are restoring oil production at the pace of 400,000 barrels per day since August and this plan is the base one Read more »

Wealth First Po Consolidated September 2021 Net Sales at Rs 7.59 crore, up 32.34% Y-o-Y

Reported Consolidated quarterly numbers for Wealth First Portfolio Managers are: Net Sales at Rs 7.59 crore in September 2021 up 32.34% from Rs. 5.74 crore in September 2020. Quarterly Net ... Read more »

Sundaram Consolidated September 2021 Net Sales at Rs 14.41 crore, up 14.09% Y-o-Y

Reported Consolidated quarterly numbers for Sundaram Finance Holdings are: Net Sales at Rs 14.41 crore in September 2021 up 14.09% from Rs. 12.63 crore in September 2020. Quarterly Net Profit ... Read more »

Tesla unveils all-electric children's ‘Cyberquad' — starting at $1,900

Franz von Holzhausen, Tesla’s design chief, tweeted out a video of his children trying out the new product. Twitter / Franz von Holzhausen Elon Musk’s electric car company Tesla quietly ... Read more »

Cabinet sees no need for further compensation for inflation

Photo: ANP The caretaker government does not intend to do more to compensate households for the rapidly rising inflation. Various parties had asked State Secretary Dennis Wiersma (Social Affairs) for ... Read more »

WhatsApp can help onboard next 500 million users on UPI, says India head

Continuing its push to grow the usage of Unified Payment Interface (UPI) on its platform, WhatsApp India’s head Abhijit Bose said that the instant messaging app can be instrumental in ... Read more »

Crystal Group's founder Kenneth Lo leads honours at the 2021 DHL-SCMP Hong Kong Business Awards

Kenneth Lo, the textile magnate who incorporated the gender equality best practices and anti-sexual harassment awareness into the employee care programme of the world’s largest clothing producer, has been awarded ... Read more »

Industry chiefs upbeat on outlook Post forum examines trends after Covid

“In the next year, a lot of ATMs will disappear as they will be replaced by a cashless payment system on apps. A cashless society is coming faster than ever,” ... Read more »

Singapore's first wave SPACs to move ahead with filing plan: sources

A Spac-driven surge in listings would benefit Singapore’s paltry listing volumes. SINGAPORE (BLOOMBERG) – Vertex Holdings, a unit of Singapore state investor Temasek Holdings and European asset manager Tikehau Capital ... Read more »

China issues directive to bring Boeing 737 Max back to the skies after more than 2 years

This photo taken on December 15, 2018 shows a Boeing 737 MAX 8 airplane delivered to Air China during a ceremony at Boeing Zhoushan 737 Completion and Delivery Center in ... Read more »

Former lawyer of Donald Trump to auction NFT of memoir written in prison

Michael Cohen speaks to the media as he leaves a federal court in the Manhattan borough of New York City, New York, on November 22, 2021. Reuters/Carlo Allegri Michael Cohen, ... Read more »

Investors richer by over Rs 5.35 lakh crore in two days of market rally

Representative image Equity investors became richer by over Rs 5.35 lakh crore in two days of market rally despite largely negative global cues amid concerns over the Omicron strain of ... Read more »

Maharashtra govt revises COVID-19 guidelines for international passengers

As per the revised guidelines, domestic passengers who are fully vaccinated need not carry an RT-PCR test report. (Image: News18 Kerala) The Maharashtra government on December 2 revised the COVID-19 ... Read more »

Stamp-duty cut drives apartment registrations' 79% YoY growth till Nov 2021, in Greater Kolkata: Knight Frank India

In November, the smallest apartments fell out of favour most severely (Representational image.) Residential property registrations in Greater Kolkata in the 11-month period of 2021 touched 40,972, of which more ... Read more »

How cryptocurrency has already divided top Indian policymakers

Private virtual currencies have been the subject of serious debate for quite some time. The crypto lobby has been pitching the technology advantage of cryptocurrencies and has already unleashed a ... Read more »

Everything you need to know about Tesla's new HQ in Texas

According to Texas Monthly, Tesla stated that 65% of the jobs provided will be middle-skilled and not require college degrees. Tesla’s highly publicised departure from the sepia-toned pastures of Silicon ... Read more »

Mercedes-Benz India to hike prices of select models by up to 2% from January 2022

German luxury carmaker Mercedes-Benz India on Thursday said it will hike prices of select models by up to two per cent from January 1, 2022, to offset feature enhancement and ... Read more »

Dhanlaxmi Bank Chairman G Subramonia Iyer resigns citing personal reasons

G Subramonia Iyer, part-time Chairman and Independent Director of Kerala-based Dhanlaxmi Bank, has submitted his resignation citing personal reasons, the bank informed the stock exchanges on December 2. Iyer has ... Read more »
On free-english-test.com you will find lots of free English exam practice materials to help you improve your English skills: grammar, listening, reading, writing, ielts, toeic