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WeWork 2.0 – Buyer Beware

CEO Sandeep Mathrani (Credit: WeWork)

WeWork’s losses almost quadrupled to $2.1 billion in Q1 2021, as the co-working company lost more than a quarter of its members over the past year, according to the Financial Times. The troubled startup is still planning on going public via a SPAC deal with BowX Acquisition Corp.

By the numbers: WeWork’s quarterly revenues fell almost 50% year-on-year from $1.1 billion to $598 million and the number of WeWork “members” fell from 693,000 in March 2020 to 490,000 a year later.

Cleanup on Aisle 7: WeWork CEO Sandeep Mathrani made headlines earlier this month when he disparaged employees who choose to work from home rather than an office. Speaking at the Wall Street Journal’s Future of Everything Festival, he said that “those who are least engaged are very comfortable working from home.” On Friday, Mathrani apologized on LinkedIn.

Terrible history cannot be forgotten: WeWork paid $190 million in cash and preferred stock in April 2019 for Managed by Q, an online facilities management platform. It was sold 11 months later for $28 million. Last year WeWork offloaded a 90% stake in an online events platform, Meetup, for just $9.5 million, a fraction of the $156 million cash price paid in 2017. It wrote off $23 million prior to selling Refresh Club, a women’s co-working space, and the same amount in relation to SpaceIQ, a workplace management tool. Other acquired businesses, including Spacious Technologies (a shared workspace provider), Prolific Interactive (a design agency) and Waltz (smartphone authentication), were wound down, resulting in a further $70 million of impairments, Bloomberg noted.

Media still doing Adam Neumann yeoman’s work: This from NBC: “As corporate America scrambles to lure workers back to their cubicles by way of meditation classes and elevator apps, the coronavirus pandemic may have opened up a new opportunity for the beleaguered flexible lease company WeWork to make a turnaround and thrive.” When will the love fest end?

Ignore the spin: WeWork Chairman Marcelo Claure said earlier this week: “Demand for WeWork space today is higher than it was prior to the pandemic.” [FT+Bloomberg+WSJ+SFGate]

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