Masayoshi Son, chairman and CEO of SoftBank Group, pictured this month. (Photo by Alessandro Di Ciommo/NurPhoto via Getty Images)
NurPhoto via Getty Images
If all else fails, there is always a SPAC.
WeWork, the coworking business that attempted—and failed—to go public in 2019, could soon reach that milestone via a special purpose acquisition company, according to a new report. SPACs, which have become the latest rage on Wall Street, are a much faster alternative to the conventional IPO process, giving companies quicker access to capital and the ability to sidestep months of scrutiny from potential investors during an IPO roadshow.
According to The Wall Street Journal, which reported the news, WeWork has received offers from at least two SPACs, including one tied to Bow Capital Management, a California firm. A deal—which may or may not materialize—could potentially value WeWork at roughly $10 billion, the article added, though specific details could not be confirmed. The Journal noted that the company could instead stay private through an additional funding round.
A spokesperson for WeWork did not immediately respond to a request for comment.
WeWork, once one of America’s most valuable private companies, was cofounded in 2010 by Adam Neumann and Miguel McKelvey. For years, the business’ footprint exploded thanks to endless cash infusions from venture capitalists, most notably SoftBank, which poured in billions of dollars through its Vision Fund. At one point, WeWork was valued at $47 billion.
The music stopped when the company tried to go public in the fall of 2019. Its prospectus revealed massive losses that the company try to veil through financial gymnastics, with accounting terms it invented like “community adjusted earnings before interest, taxes, depreciation and amortization.”
WeWork was further hurt by press reports over Neumann’s conduct, including allegations that he flew on a private international flight with a large amount of marijuana. (He declined to comment for that story.)
Neumann stepped down as WeWork’s CEO soon after, and the company scrapped its IPO plans. As part of his exit, Neumann was slated to receive a $1 billion windfall from SoftBank. The Japanese firm revoked its offer last spring, spurring litigation that remains ongoing.
For WeWork, which has tried to find stability under its new chief executive, Sandeep Mathrani, a SPAC may finally give the company the exit it always wanted.