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WeWork Launches $3 Billion IPO, Reveals Huge Losses

Courtesy of ZeroHedge View original post here.

As expected, WeWork – or “the We Company”, as its struggling to rebrand itself – published on Wednesday the prospectus for its hotly anticipated IPO, which it confidentially submitted to the SEC months ago.

Of all the ‘tech’ darlings that have either recently IPO’d, or are expected to in the near future, WeWork’s business so far has involved burning ever-more cash (roughly in line with revenue growth) while its CEO, Adam Neumann, shares his grandiose, expansive vision to build an office-space leasing company, that’s also a provider of adult dorms, and a private school, and generalized lifestyle company.

To back up that vision with numbers, Neumann’s company listed its Total Addressable Market in its S-1 as $3 trillion, equivalent to roughly 15% of the US economy. Meanwhile, the company generated $1.54 billion in revenue in the first six months of 2019 and posted a net loss of $689.7 million. Astonishingly, the company has been valued at $47 thanks to VC investments by Soft Bank and other large institutional investors. 

According to WeWork, its potential market size is 15% of US GDP. Thanks @federalreserve this is all your doing pic.twitter.com/s5YyX7iS5x

— zerohedge (@zerohedge) August 14, 2019

The IPO will leave WeWork with three classes of common stock, adding to its already complicated structure, which is set up to provide tax benefits to Neumann and other early investors.

This is almost as straightforward as Alibaba’s org chart pic.twitter.com/73vrNotjZd

— zerohedge (@zerohedge) August 14, 2019

In the filing, WeWork said it’s “reinventing” the way people work and “relate to the workplace” (admittedly, an appealing turn of phrase).

“We are reinventing the way people work and transforming the way individuals and organizations relate to the workplace,” the company said in the filing. “When we started, it was obvious to us that the solutions available in the market were not meeting the needs of the modern workforce.”

The listing is being finalized as WeWork hopes to sow up another $6 billion asset-backed financing package. That package is reportedly contingent on WeWork raising at least $3 billion from its IPO, which it’s expected to do.


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