WeWork Files IPO Prospectus, Revealing Finances of Co-Working Giant

The shared office giant once known as WeWork has filed the prospectus for its initial public offering, taking the latest step towards what is expected to be the second largest stock debut of this year.

The S-1 filing with the US Securities and Exchange Commission (SEC) provides the most detailed financials yet on the company, which lost $689.7 million in the first half of 2019 on revenues of $1.5 billion.

The paperwork provides what is believed to be a placeholder value of $1 billion for the stock offering, which earlier accounts had indicated was aimed at raising around $3.5 billion. Timing for the equity sale has not yet been finalised.

Losses Rise 4X in 3 Years

Now known as the We Company, the nine-year-old provider of shared offices has quadrupled its revenues from $436 million in 2016 to $1.8 billion in 2018. However, losses expanded just as quickly, from $429 million three years ago to $1.6 billion for the full year of 2018.

Those figures were driven by the company’s expansion, with the prospectus revealing that the We Company now has 528 locations across 111 cities.

An account in the Wall Street Journal citing sources close to the offering said that the filing would allow the We Company to achieve its listing next month, although they indicated that the debut, under the ticker symbol “WE”, might still come later this year.

WeWork had revealed in April this year that it had confidentially submitted the official paperwork for its IPO late in 2018.

Filing Follows Debt Arrangements

The We Company’s prospectus was filed less than one week after it was revealed that the serviced office provider, which has been valued at as much as $47 billion, had worked with JP Morgan Chase, Goldman Sachs and other banks to arrange $6 billion in debt financing.

That debt injection, which is said to be conditional on the IPO raising at least $3 billion, also requires WeWork to retain at least $2.5 billion to $3.5 billion in cash on hand over the next several years, as a cushion against the startup’s propensity to burn through capital, according to the Wall Street Journal account.

With Uber’s stock still under water after its $8.1 billion May IPO, as a further assurance to bankers who may worry about the prospects for the We offering, earlier reports indicated that the shared office startup is offering fees of 3.5 percent to banks underwriting the offering – more than double the 1.3 percent that Uber provided.