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| Clermont Meridian Trading Reports WeWork To Go Public Via SPAC Deal with BowX Acquisition Corp |
WeWork has agreed to merge with BowX Acquisition Corp, a blank-check corporation, in a deal that values the office-sharing startup at $9 billion, including debt. Clermont Meridian Trading financial analysts have reviewed the decision.
It is a far cry from the $47 billion WeWork was valued for an IPO in 2019, ahead of a bungled IPO that failed due to investor concerns about the company's business strategy and founder Adam Neumann's managerial style.
Clermont Meridian Trading analysts predicted that the valuation could reach $65 billion at the time, but it plunged to around $8 billion after SoftBank was obliged to give a lifeline to WeWork.
WeWork informed prospective investors it lost approximately $3.2 billion last year as part of a pitch for a stock market listing by combining with a special purpose acquisition company (SPAC).
“The current deal will net WeWork $1.3 billion in cash, including $800 million in private investment from Insight Partners, Starwood Capital, Fidelity Management, and others,” said Andrew Wakefield, Head of Corporate Derivatives at Clermont Meridian Trading.
A SPAC is a shell company that uses proceeds from a public offering to buy a private company, and WeWork is the latest in a long line of high-profile companies.
SPAC mergers have also been chosen by Tesla's rival Lucid Motors and Richard Branson's Virgin Galactic over traditional IPOs.
Grab, Southeast Asia's ride-hailing and food-delivery behemoth, are in talks to go public in the United States through a $40 billion mega-merger. BowX Acquisition's initial public offering (IPO) in August last year raised $420 million.