WeWork posts $690m loss as it plots share sale

3 views
0
weworkImage copyright Getty Images

The owner of office space company WeWork burned through $900m (£746m) in the first six months of this year, according to figures ahead of its hotly-anticipated stock market launch.

Documents filed with regulators reveal The We Company, valued at about $47bn, doubled revenues to $1.54bn.

The firm is set to launch on Wall Street next month, but it is not clear how many shares will be available.

WeWork offers serviced office space, often to small, new business ventures.

Critics say it must fulfil long-term contracts with landlords using short-term contracts with its customers, making it vulnerable to downturns, should its custom dry up.

So far it has not turned a profit, but since starting in 2010 it has had terrific growth, spreading to 528 locations in 111 cities.

And a stock market listing would come as markets endure a volatile period due to the UK’s EU exit and the US trade war with China.

If the sale of shares goes ahead, known as an Initial Public Offering or IPO, it will be the biggest such event this year in the US since taxi firms Uber and Lyft floated.

The IPO filing with the Securities and Exchange Commission provides the most comprehensive financial picture yet of the company co-founded by its chief executive, Adam Neumann, in 2010.

The company previously reported it lost nearly $2bn in 2018, as it invests heavily to grow its business.

We Company did not give a time frame for becoming profitable as it continues to invest in expanding operations. “Average revenue per WeWork membership has declined, and we expect it to continue to decline, as we expand internationally into lower-priced markets,” the company said.

The flexible office market has growth fast in major gateway cities, most notably London, New York and San Francisco. While WeWork is considered the market leader, there are fast-growing rivals.

WeWork, whose current investors include Japan’s SoftBank, did not disclose how much it is looking to raise in the IPO and what valuation it will aim for. This will come in an amended IPO filing, which would precede a 10-day IPO roadshow to meet with potential investors.

The company intends to list on the stock market under the symbol “WE”.

LEAVE A REPLY

Please enter your comment!
Please enter your name here