Can WeWork make the jump to being a Public Company and collect $150 Million from Cushman & Wakefield?
WeWork is going Public today via a merger with a SPAC, BowX Acquisition Corp. Cushman & Wakefield Plc has announced plans to invest $150 million into the deal when WeWork completes the deal with the SPAC. The value of the deal is roughly $9 Billion, well below the valuation that WeWork had in the early days of Softbank’s involvement when they were valued at $47 Billion. The original IPO that was being contemplated in 2019 valued WeWork at between $20-30 Billion.
This deal for Cushman’s investment came from the partnership that they announced in August but nothing was signed at that time. WeWork’s business has benefitted from the pandemic and the anemic pace of employees returning to the office. The Delta variant has pushed the timeframe for RTW back months as Covid spreads and the pace of vaccinations has slowed.
“The partnership we announced with Cushman & Wakefield in August is a testament to WeWork’s long-term value proposition and we remain incredibly excited about the opportunities that lie ahead as we team up with one of the leading real estate firms in the world,” in a statement released by WeWork last Sunday.
What is the lesson of WeWork?
The WeWork saga has been documented in numerous articles and stories and even a video that is posted on Hulu about WeWork’s founder, Adam Neumann. Not a particularly flattering review of the founding and development of the Company, the video piece is fascinating and eye opening for investors and founders of startups. Too much power in the hands of a young, inexperienced founder with huge amounts of investor cash behind them can be a recipe for disaster or the next Facebook!
The BowX shareholders have now approved the transaction and the deal is closing today. Stay tuned to see where the stock trades.