WeWork said on Friday it has agreed to go public through a merger with blank-check firm BowX Acquisition Corp, enabling the office-sharing company to complete a stock market listing two years after its failed first attempt.
The merger with BowX, a special purpose acquisition company (SPAC), values WeWork at around $9 billion, a steep drop from the $47 billion the money-losing company was worth in a 2019 private funding round led by Japanese conglomerate SoftBank Group Corp.
Later in 2019, WeWork attempted an initial public offering but pulled the plans due to investor concerns over its business model and co-founder Adam Neumann’s management style.
Neumann ultimately stepped down as chief executive. Sandeep Mathrani is now CEO, and his work has included cutting costs by $1.6 billion, according to WeWork.
“Sometimes you don’t pick the path (and) a path picks you. In December, we were approached by BowX and other SPACS,” Mathrani told CNBC in an interview.
“We had seen a path to profitability and we thought it was a good time to raise additional liquidity to de-risk the balance sheet, and to make sure that we have a path to profitability,” Mathrani added.
BowX shares on Nasdaq were up 8% in morning trading.