WeWork doubles revenue, but operating loss as well

Adam Neumann Photo: Reuters

The shares workspace company, which recently changed its name to The We Company, has filed an IPO prospectus.

Shared workspace company WeWork continues to make progress towards an IPO in New York next month, led by JP Morgan and Goldman Sachs. Yesterday, WeWork, which recently changed its name to The We Company, filed an S-1 prospectus with the US Securities and Exchange Commission.

The prospectus shows that the company made a loss of $700 million in the first half of 2019 on revenue of NIS 1.54 billion. Other companies with huge losses, such as Uber and Lyft, recently managed to make IPOs at valuations in the tens of billions of dollars. According to the prospectus, in 2018 WeWork made a loss of 1.6 billion on revenue of NIS 1.82 billion.

We Company was reportedly recently valued at $47 billion when its largest investor, Softbank, injected $2 billion into it in January.

The company, founded nine years ago by Israeli entrepreneur Adam Neumann, who serves as its CEO, will try to raise $3-4 billion in the IPO. Up to now, it has raised $8.4 billion, mostly from Softbank.

We Company sates in the prospectus that at the same time as the IPO it plans to raise $6 billion debt.

We Company's revenue in the first half of 2019 was more than double that of the corresponding period in 2018. The company's operating loss also doubled, however, to $1.4 billion. The company explains that it continues to invest heavily in business development, marketing and sales, discounts to new renters and subscribers, and other areas.

We Company currently has some 527,000 customers around the world, 90% more than at the end of the first half of 2018, and 31% more than at the end of last year. The company leases offices on long leases (generally 15 years or longer), mostly from income producing real estate companies, at 528 sites around the world. This is up from 465 sites at the end of the first quarter of 2019. It rents out office space to companies and private individuals. 50% of the company's sites are outside the US, some of them in Tel Aviv.

At the end of June, the company had $2.5 billion cash, which compares with $1.7 billion at the end of 2018.

In May, The We Company reported that Neumann planned to sell to it four properties in which he is a partner in New York and which he leases to the company, as a measure intended to remove a possible conflict of interests in advance of the IPO. In the prospectus, the company confirmed that the sale would take place before the IPO.

Published by Globes, Israel business news - en.globes.co.il - on August 15, 2019

© Copyright of Globes Publisher Itonut (1983) Ltd. 2019

Adam Neumann Photo: Reuters
Adam Neumann Photo: Reuters
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