WeWork, which had one of the crucial spectacular IPO implosions in recent times, is making an attempt to go public once more—and a few of the elements that nervous regulators on the primary deal are again once more.
WeWork isn’t doing an preliminary public providing this time, however merging with a special-purpose acquisition firm, or SPAC. Guidelines round SPACs are looser than for IPOs, giving WeWork extra leeway to tout its future.
The shared-office supplier is predicted to merge with a SPAC known as BowX Acquisition Corp.
BOWX,
later this 12 months. As the 2 entities promoted the deal to traders, they painted an optimistic situation for the corporate’s development and profitability.
BowX’s chairman described WeWork in a name with traders as a $5 billion income firm, although that determine is a projection somewhat than a present quantity. When describing WeWork’s measurement, the corporate counted models that WeWork doesn’t personal straight.
WeWork is predicting a speedy restoration from the pandemic downturn, which hit its enterprise notably exhausting as a result of few individuals have been utilizing workplaces, a lot much less shared house, and since it was nonetheless on the hook for long-term leases. The corporate can be utilizing a brand new revenue measure that reveals larger margins than it claimed in late 2019.
Within the run-up to the IPO, the Securities and Trade Fee informed WeWork to alter sure revenue and development measures that it was utilizing. The latest investor presentation by BowX has “echoes of the corporate’s method in 2019,” stated Minor Myers, a regulation professor on the College of Connecticut who makes a speciality of company finance. “The SEC might push again exhausting once more,” he stated, except WeWork tones down these claims in its official filings with regulators, anticipated later this month.
An expanded version of this report appears on WSJ.com.
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