NEW YORK, (Washington Insider Magazine) – Office-leasing company WeWork lost over $2 billion in the first quarter of 2021, as it prepares to go public through a SPAC deal more than a year after it initially sought to IPO.
The company reported a net loss of $2.06 billion on sales of $598 million. Occupancy rose to 50 percent, up slightly from the previous quarter, the company said Thursday in a press release.
“WeWork continued to see encouraging signs of recovery with sales activity, a critical indicator of future revenue, ramping over the first quarter, as the company achieved gross desk sales of 24k in January, 25k in February, and 38k in March,” the company said.
WeWork said it spent $494 million on “restructuring costs” driven by Japanese tech giant SoftBank’s stock purchases, and a settlement with ousted CEO and co-founder Adam Neumann.
The company said it finished the quarter with $2.2 billion in liquidity, including $719 million in cash on hand.
The company is in the midst of a turnaround effort led by CEO Sandeep Mathrani, who was chosen to replace Neumann by Softbank, which has invested at least $18.5 billion in WeWork since 2017, largely at a much higher valuation than the company currently is believed to command.
Neumann was ousted at the end of 2019, after the company filed to IPO only to shelve those plans over scrutiny from the media and investors about the company’s questionable path to profitability and corporate governance under Neumann.
Now the company’s trying to trim costs, right-size the ship and focus on its core office-leasing operations ahead of its long-awaited public debut.
WeWork announced in March that it was finally going public later this year through a merger with BowX Acquisition Corp, a special purpose acquisition company, or SPAC. The deal could value the company at $9 billion.