What a long and bizarre journey this has been. Only slightly more than two years after its initial public offering (IPO) was smashed into a million documentary films, WeWork went public via SPAC yesterday. WeWork was valued at $9 billion in this transaction; in 2019 the firm was worth $47 billion.
WeWork, although on a smaller scale
Its mission statement for 2019 said that the company’s goal was to “elevate the world’s consciousness.” Today, the company’s objective is to “use us so your staff don’t go insane working from home.” According to the shared-office company, it is well positioned to provide space to enterprises with global workforces that operate on a more flexible work schedule.
Another encouraging trend for WeWork is the rise of the entrepreneurial spirit. Applications for new enterprises increased by 24 percent year on year in 2020, making it the most successful year on record. Growing businesses can attest, make good candidates for WeWork offices as potential clients.
The corporation is still struggling to climb out of its financial quagmire. WeWork suffered a total loss of over $6 billion in the past year and a half leading up to this summer as the epidemic slowed the flow of business. As of June 1, occupancy rates were only 55%, which is low by any standard. CEO Sandeep Mathrani has been on a cost-cutting binge in order to put the company at the forefront to be profitable next year. He has eliminated thousands of positions and renegotiated leases in order to do so.
What about Adam Neumann, you ask?
He has no remorse about wrecking the party. When financial documents revealed very dubious corporate governance procedures at the company, among many other red flags, the erstwhile CEO and cofounder, whose marketing acumen was only rivalled by his predilection for entertaining ragers, he was forced to quit in disgrace in 2019.
He, on the other hand, is doing just well. Following his share sales, Neumann’s equity in the new business is now worth $722 million, as reported by Bloomberg. Neumann retains an 11 percent voting power at WeWork. Neumann’s name occurs 197 times in the SPAC document, which is a significant number.
Consequently, Neumann’s appearance at a party in Manhattan with cofounder Miguel and other WeWork workers was not unusual. He said that the incident had taught him “hard lessons,” but he added he was “excited for the future.”