WeWork at it Again: Loses $3.2 Billion, Plans to Go Public

WeWork is at it again – or rather SoftBank, its primary investor and bail-outer. WeWork disclosed in documents shown to prospective investors that it had lost $3.2 billion in 2020, on top of the $3.5 billion it had lost in 2019, for a two-year loss of $6.7 billion, and this isn’t a net loss under GAAP, but based on adjusted earnings before interest, taxes, depreciation, and amortization. The actual net loss under GAAP would be much higher.

The $3.2 billion loss in 2020 also excludes WeWork’s China business whose majority stake it had sold in September 2020.

The occupancy rate at its offices across the globe had plunged to 47% at the end of 2020, down from 72% during the Good Times at the beginning of 2020. And this happened despite WeWork’s walking out on landlords and abandoning office leases around the world, including in San Francisco and New York City.

To survive, WeWork cut its capital expenditures from $2.2 billion in 2019 to just $49 million in 2020, according to the documents, which the Financial Times has reviewed.

With this illustrious performance under its belt, WeWork is trying to raise $1 billion in new funding and engineer a public listing through a merger with a SPAC at a valuation including debt of $9 billion.

That $9 billion is still a huge amount of money for a company that loses huge amounts of money, but a big step down from its $47 billion “valuation” obtained in a round of funding from SoftBank in January 2019.

In the summer of that year, the super-ballyhooed IPO of WeWork collapsed into chaos, followed by massive rounds of layoffs and cost cuts, and SoftBank stepped in with a big package of rescue funding to keep the outfit out of bankruptcy.

A bankruptcy filing is the avenue competitor Knotel has chosen in February this year to deal with its fate. It didn’t have the endless billions to burn through that WeWork got.