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WeWork
Inside a WeWork office
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, set to launch on Wall Street next month, is investing heavily in expansion, according to the documents.
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.
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But 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.
However, the ride-hailing rivals have struggled since listing, potentially making investors wary of future blockbuster IPOs.
Analysts, though, said We Company’s doubling of revenues would help ease investor concerns.
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 invested 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 grown swiftly 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”.