WeWork, Spectacular Debut on First Day of Listing via SPAC Merger

Sandeep Mathrani, CEO of WeWork (photo left)

[Asia Economy Reporter Yujin Cho] WeWork, which faced continuous setbacks including a failed initial public offering (IPO) two years ago, founder embezzlement controversies, and large-scale restructuring, has entered the stock market through a merger with a special purpose acquisition company (SPAC).

According to the Wall Street Journal (WSJ) on the 21st (local time), WeWork, listed on the New York Stock Exchange (NYSE) through a merger with SPAC BowX Acquisition, closed its first day trading at $11.78, up 13.49%.

The merged company's value of BowX Acquisition and WeWork was estimated at $9 billion (approximately 10.6 trillion KRW).

SoftBank of Japan, the largest shareholder of WeWork, holds a majority stake in the merged company. Marcelo Claure, WeWork Chairman and SoftBank Chief Operating Officer (COO), decided to maintain his involvement in WeWork's management.

WeWork stated in its securities registration statement that due to decreased demand caused by COVID-19, its market share dropped to 55% as of early June, down from 58% in the same period last year.

Sandeep Mathrani, CEO of WeWork, said, "We improved our cost structure during the COVID-19 period and expect to return to profitability next year."

Founded in 2010 in New York, WeWork was a leader in the office-sharing industry and attracted significant investment from SoftBank, gaining market attention. However, its IPO attempt in September 2019 failed due to distorted accounting methods related to profits and losses, overvaluation controversies, and corporate governance skepticism.

Subsequently, co-founder and CEO Adam Neumann was dishonorably dismissed amid embezzlement controversies, and as financial difficulties continued due to business contraction, SoftBank became the largest shareholder (with an 80% stake) through an emergency capital injection of $9.6 billion.

Afterward, WeWork's valuation plummeted from $47 billion to $8 billion within a few months, facing bankruptcy threats and undergoing intense restructuring, including laying off more than 2,400 employees worldwide.