WeWork, which had one of the most spectacular IPO implosions in recent years, is trying to make itself public again and some of the factors that worried regulators of the first deal are back.
WeWork is not making an initial public offering this time, but is merging with a special purpose acquisition company or SPAC. The rules on SPACs are looser than IPOs, giving WeWork more leeway to promote its future.
The shared office provider is expected to merge with a SPAC called BowX Acquisition Corp. at the end of this year. When the two entities promoted the deal with investors, they painted an optimistic scenario for the company’s growth and profitability.
The BowX chairman described WeWork in a call with investors as a $ 5 billion revenue company, though that figure is a projection more than a current number. In describing the size of WeWork, the company counted units that WeWork does not directly own.
WeWork predicts a rapid recovery from the pandemic crisis, which especially affected its business because few people used offices, much less shared space, and because it was still stuck in long-term leases. The company also uses a new profit measure that shows higher margins than it claimed at the end of 2019.