WeWork seeking SPAC merger after recording USD 3.2 billion loss in 2020
Category: #headlines  By Pranali Mehta  Date: 2021-03-24
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WeWork seeking SPAC merger after recording USD 3.2 billion loss in 2020

American commercial real estate firm WeWork has reported a loss of USD 3.2 billion in the year 2020. The company presented its revenue report to potential investors to secure around USD 1 billion investment as well as a stock market listing.

WeWork’s losses have reportedly declined from USD 3.5 billion it had previously recorded in 2019. The office-sharing startup is also planning to be publicly listed at a USD 9 billion valuation through a merger with a SPAC (special purpose acquisition company).

A SPAC is basically a shell company that merges with a private firm, allowing it to not only raise funds but also be publicly listed. There has been a growing trend of SPAC mergers since the COVID-19 lockdowns had resulted in severe monetary repercussions for several businesses, further delaying their respective IPO plans.

WeWork is currently in merger talks with blank-check company BowX Acquisition Corp., which had secured USD 420 million in August 2020. However, the company has declined to comment on the recent development.

It is worth mentioning that WeWork’s initial plans of conducting a high-profile IPO in October 2019 were delayed after the company received considerable criticism for its business model. Moreover, its key investor SoftBank Group had also bailed out the office-sharing startup.

WeWork predicts that its occupancy ratio is likely to rebound to 90% by the end of 2022, from the 47% it had recorded last year during the COVID-19 pandemic and the subsequent lockdowns.

The startup has also claimed that the adjusted earnings before depreciation, taxes, interest, and amortization will account for USD 485 million in 2022.

In similar developments, Israeli-based app-monetization startup ironSource has announced that it will be going public at a valuation of USD 11.1 billion through a SPAC merger. Sources claimed that the deal is primarily driven by the increasing popularity of mobile games and apps.

Source Credits –

https://www.reuters.com/article/us-wework-results/wework-discloses-3-2-billion-loss-in-2020-as-it-seeks-spac-deal-source-idUSKBN2BE2YN

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Pranali Mehta

Pranali Mehta    

Pranali Mehta boasts of over three years of experience as a content writer. Having completed her graduation in chemical engineering, she worked as safety & environment associate in a chemical company for a year. Harnessing her passion for writing however, Pranali deci...

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