Is WeWork bouncing back? Troubled shared office space company reaches $228 million in revenue in September – its highest this year – and occupancy reaches 60% ahead of it listing on NYSE
- WeWork’s comeback comes after the company lost $2billion in the first quarter
- It says its revenues have been gaining steam for the past five months, with Setember’s $228million in revenue marking the year’s highest growth period
- WeWork is preparing to merge with a blank check company and go public
Embattled office space provider WeWork says it revenues are on the upswing as it prepares to go public by merging with a blank check company.
WeWork – which lost $2billion in the first quarter of 2021 – accumulated $658million in revenue during this year’s third quarter, its executives said Wednesday during a virtual investor day.
It’s been steadily gaining steam for five consecutive months, with September’s $228million in revenue marking the year’s highest period of growth, the company said.
‘In the pre-pandemic world, flex was part of an office offering,’ WeWork chief executive Sandeep Mathrani said in a statement.
‘In a post-pandemic world, flex is its own channel of distribution, much like e-commerce is its own channel of distribution.’
Chief executive Sandeep Mathrani says he’s excited for growth ahead as WeWork prepares to merge with blank check company BowX Acquisition Corp. later this month
WeWork says it’s out of the red following a brutal first quarter, where it lost $2billion
He said the flexible workplace market is ‘one of the most exciting things’ for the company.
‘[It] gives us confidence as to the growth potential of our business, even just looking at the traditional space-as-a-service business.’
The company’s comeback follows its first quarter losses of $2billion, due largely to COVID-19 shutdowns and a settlement with ousted former chief executive Adam Neumann.
The pandemic led to many office staffers working from home. The company lost around 200,000 customers in a year, plummeting to 490,000 by March.
The office-sharing company’s third-quarter revenue reached $658 million, executives said
The office-sharing venture also settled with Neumann for a non-cash writedown of $500million, Bloomberg reported.
WeWork said during its recent investor presentation that occupancy is now trending in the right direction and is up 52 percent quarter-over-quarter.
The company said it also slimmed down expenses, slashing operating costs and amassing $400 million in annual rent savings through ‘portfolio optimization efforts.’
WeWork shared its underdog success ahead of its planned merger with BowX Acquisition Corp.
WeWork reportedly paid ex-boss Adam Neumann $500 million in a settlement agreement
Stockholders of BowX Acquisition Corp., a special purchase acquisition company, will vote to acquire WeWork during an October 19 special meeting and if the deal is greenlighted, it will be listed on the NYSE later this month.
It’s not the first time WeWork tried to go public.
The startup scrapped previous plans for an initial public offering in 2019, following Neumann’s departure.
Company executives said at the time that they decided to ‘postpone our IPO to focus on our core business, the fundamentals of which remain strong.’
But they signaled they still intended to take the company public, saying, ‘We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future.’
Neumann stepped down after his unusual personal conduct – and use of company assets – came under fire.
Shortly before quitting, he was alleged to have smoked marijuana with friends on a private flight from New York to Israel, The Wall Street Journal reported.
The unconventional executive used WeWork’s corporate jet as his office in the sky to meet with employees as he traveled for work.
He also held parties on the customized aircraft, and used it to shuttle his wife, Rebekah, and their five children around the globe.
Neumann stepped down in September 2019, saying: ‘The scrutiny directed toward me has become a significant distraction, and I have decided that it is in the best interest of the company to step down as chief executive.’