WeWork belatedly makes Wall Street debut

Shared workspace provider closes first day of trading up more than 13 per cent, two years after first attempt

SAN FRANCISCO, CALIFORNIA - OCTOBER 07: A sign is posted on the exterior of a WeWork office on October 07, 2019 in San Francisco, California. Days after withdrawing its registration for an initial public offering, WeWork also warned employees that the company could be set to lay off nearly 2,000 people, about 16 percent of its workforce.   Justin Sullivan/Getty Images/AFP
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WeWork finally made its stock market debut on Thursday after spectacularly collapsing in its first attempt that led to the ousting of chief executive and co-founder Adam Neumann two years ago.

WeWork started trading on the New York Stock Exchange under the ticker symbol “WE”. It closed at $11.78 per share, up 13.49 per cent for the day.

The company is coming out more than a year into a pandemic that closed millions of square metres of office space and the hope is that a work environment turned upside down is the ideal time for a company that sells shared workspace to thrive.

The group abandoned its plans for an IPO in 2019 after its business model and Mr Neumann's exorbitant spending drew concerns from investors. The company had been valued at $47 billion before investors began to buck.

Now, two years later, and with significant changes to its top leadership, the company is trying again.

Shareholders from a special-purpose acquisition company (SPAC), called BowX, voted on Tuesday to merge with WeWork. The deal reportedly valued the company at $9bn, well below its 2019 valuation.

Japan’s SoftBank, a major early investor, will hold a majority stake as part of the SPAC. Mr Neumann is not out of the picture either and will hold voting power of more than 10 per cent in the newly formed company.

After the IPO disaster, WeWork’s business was further battered by the Covid-19 pandemic. Many customers cancelled leases and stopped paying rent when the economy turned and workers stayed at home. WeWork’s loss ballooned to more than $2bn in the first quarter of this year.

Things have rebounded in recent months, WeWork executives have said. Revenue in the first half of the year was $1.19bn.

The company has shifted its focus from young freelancers towards companies with hundreds of employees looking for spaces in urban centres, greatly accelerated by telecommuting policies implemented during the Covid-19 pandemic.

“WeWork has transformed its business by overhauling its operations and cost structure, rightsizing its real estate portfolio and most importantly, refocusing on its core product,” Anthony Yazbeck, the group's chief operating officer, told Agence France-Presse.

The group, which has 762 workspaces in 38 countries and 150 cities, generated $658 million in revenue between July and September, but continues to lose money.

Agencies contributed to this report

Updated: October 21, 2021, 9:31 PM