WeWork, the co-working giant that has provided entrepreneurs with both convenient office space and a cautionary tale of bad management practices, went public on Thursday.
The company's filing is the result of a merger with BowX Acquisition, a Special Purpose Acquisition Company. SPACs are shell companies that raise funds to acquire a private business and take it public, within about two years of forming the SPAC.
SPACs have been popular particularly because they require less legwork than a traditional IPO, but the Securities and Exchange Commission toughened relevant regulations this year. WeWork had attempted to go public in 2019, but the plan fell through when documents revealed the company was burning through cash, alarming investors. Concerns also emerged about co-founder and then-CEO Adam Neumann's leadership, forcing him out of the company.
WeWork's current CEO is Sandeep Mathrani, who worked to cut $1.9 billion in costs during the pandemic and told CNBC's Squawk Box the company is on the path to generating a profit next year.
Many business owners have a stake in WeWork's continued success. Co-working spaces can be ideal for solopreneurs, as well as for new companies looking to collaborate with less overhead. They also can serve as a haven for remote workers, even post-pandemic.
Still, WeWork's story is a cautionary tale about founder hubris and sky-high valuations. Softbank, the company's principal investor, ignored red flags en route to valuing WeWork at $47 billion in January 2019--only to take it down to $10 to $12 billion by the fall of that year. Much of the startup's journey is recounted in the recent documentary WeWork: Or the Making and Breaking of a $47 Billion Unicorn.
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