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WeWork seeks SPAC deal, announces $3.2B loss in 2020 due to COVID-19


Source: Bloomberg.com

WeWork is a commercial office-sharing start-up or rather a real estate company that offers shared workspaces for technology-based start-ups and tech services for other companies. Recently, the start-up has disclosed that it underwent huge losses in Financial Year 2020 when the COVID-19 pandemic was at its peak.

According to Reuters, WeWork mentions in a statement that it lost over USD 3.2 billion in 2020. This information was a part of the company’s presentation that it was pitching to one of its prospective investors to seek investment and a stock market listing of USD 1 billion.

The report further mentioned that the workspace sharing company is looking out to for an Initial Public Offering at USD 9 billion valuation including debt through merger aspect along with a SPAC- Special Purpose Acquisition Company, as mentioned by two people directly familiar with the matter, who were directly briefed on the presentation by WeWork.

You must be wondering what raising funds through SPAC means? Well, a Social purpose Acquisition Company is simply a shell company that looks out to raise funds in an Initial Public Offering with an aim to ultimately become a public company. Through this methodology, the shell company first aims to acquire a private company when later becomes a public company as a result of the previous merger.

Founded back in 2010 by Adam Neumann and Miguel McKelvey, WeWork is a company that offers shared workspace to technology start-ups and it does that by designing physical and virtual shared offices for companies as well as entrepreneurs. This service provides great benefit to these tech companies who save a lot of time finding a working space and then negotiating with the landlords.

According to the company profile, it is mentioned that WeWork aims to create a world where people work to make a better life, not just living and its team members are at the centre of that goal.

Having said that, the shared workspace company mentioned in a statement that it forecasts rebound up to 90% by the last quarter of Financial Year 2020, says Reuters. The company recorded 47% at the end of Financial Year 2020 because of the COVID-19 pandemic where people were forced shut into their houses and all offices were closed. Office going people had to set up their home offices for this duration of months when physical offices and workspaces were closed around the world.

The report further mentioned that WeWork is expected to adjust its earnings before depreciation, taxes, amortization and interest of USD 485 million in the next Financial Year.



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