WeWork lost $ 3.2 billion in 2020, when the pandemic forced the closure of its coworking spaces, up from $ 3.5 billion the previous year, the Financial Times reported on Monday.
These losses occurred despite WeWork cutting its capital expenditures to just $ 49 million, down almost 98% from $ 2.2 billion in 2019, as occupancy rates on its properties plummeted by 72% to 47%, according to the Times.
But WeWork is still eyeing a public offering, now through a possible merger with BowX, a special-purpose acquisition company (
SPAC
), which has former NBA star Shaquille O’Neal among his advisers, said the report.
WeWork declined to comment.
According to the Times, WeWork is seeking $ 1 billion in new financing and expects to go public with a $ 9 billion valuation, including debt. The Wall Street Journal previously reported in January that WeWork was closing a deal with SPAC that would value it at $ 10 billion.
The new valuation would be less than a fifth of the $ 47 billion that WeWork sought when it initially announced its plans for an initial public offering in 2019. These dreams were shattered amid revelations about the company’s unstable finances, conflicts of interest and the wild party culture powered by founder and then CEO Adam Neumann.
But an investor presented by WeWork doubted his most recent projections, which included revenues of $ 7 billion by 2024, adjusted earnings of $ 485 million next year and 90% occupancy rates by the end of 2022, according to the Financial Times.
Since its fall, WeWork has been mired in legal and financial problems. SoftBank, the company’s largest stakeholder, has injected billions of additional funds into the company to help keep it afloat, even when other investors have tried to give up.
Neumann, after stepping down as CEO, also sued SoftBank for giving up on buying nearly $ 1 billion of its WeWork shares. As part of a proposed deal, Neumann will receive a $ 50 million over $ 500 million payment from SoftBank for the purchase of his shares, and will leave WeWork’s board for a year, Bloomberg reported last month, helping to open the door to a public offering.