Wework Stock

WeWork Stock

9 min read

Can you buy WeWork stock? With a $47 billion valuation, the future looked bright for WeWork. Many investors who owned shares in WeWork looked to bank huge in the much anticipated IPO. 

But something went wrong, terribly wrong for this eco-friendly workspace company. Their fall from grace was swift and unforeseen. But will the WeWork stock price recover? Keep reading to find out what we think about this mess.

WeWork’s Mission

Community is their catalyst. When WeWork started in 2010, their goal was to build more than shared office spaces. They wanted to create a community.

A community where you join as an individual, ‘me,’ but where you become part of a greater ‘we.’ A place where we’re redefining success measured by personal fulfillment, not just the bottom line. 

Our community feels a connection with WeWork’s message. We believe in giving our members the best tools to be the best traders out there. It’s about We not Me. 

Our trading service would probably be interested in WeWork stock just based off their message. However, trading it is another thing. Only trade stock with the best setups. 

What Exactly Is Wework?

Headquartered in New York, WeWork is an American commercial real estate company that provides shared work spaces for all types of companies.

From technology startups to entrepreneurs, WeWork does it all. As of 2019, WeWork managed over 5.1 million square metres in NYC alone. 

That’s quite a bit of real estate. Especially in New York City. That could be a plus for WeWork stock. If you want more stock trading ideas, then check out our stock alerts.

Wework Is More Than Just a Landlord

If you think WeWork only rents space, think again. WeWork designs and builds both physical and virtual shared spaces and office services.

As of 2019, WeWork had more than 719,000 desks, 527,000 members, spread across 111 cities in 29 countries. Those are numbers that would potentially help WeWork Stock. 

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A Fall From Grace

At this time last year, WeWork was on pace for an IPO that would add to the rolls of tech millionaires. In fact, New York was bracing for an infusion of wealth that was compared to the bonanza when FB went public. 

Until something went very, very wrong. Fast-forward to August 2019 and the release of their prospectus. With losses of close to $2 billion in 2018 and $900 million in the first six months of 2019 WeWorkwas “besieged with criticism. The cracks in their foundation over their governance, business model, and ability to turn a profit, were threatening to crumble WeWork. And crumble it did. As a result, no WeWork stock. 

A Failed Effort to Go Public With WeWork Stock

At that time, SoftBank, WeWork’s largest stakeholder, had more than $10 billion invested in WeWork. Both Softbank and WeWork planned for WeWork to realize their impressive $47 billion valuation.

Likewise, an IPO was scheduled for September 2019. But, with the impressive losses, it was an implosion like no other. WeWork’s shaky foundation sank the planned IPO before it launched.

The decision to withdraw the IPO was no surprise, though. In September 2019, amid mounting pressure from investors over its corporate governance, valuation, and outlook for the business, WeWork formally withdrew its S-1 filing.

Subsequently, they announced the postponing of their IPO. Sadly, the reported public valuation of the company was around $10 billion, less than the $12.8 billion it had raised since 2010.

Hence why we have no WeWork stock to trade today. Bummer.

Will WeWork Survive?

Will WeWork survive and give us the WeWork stock we want? Right now we don’t know. Especially with COVID 19 and people working from home. If no one is in need of office space right now, will they be able to survive? Only time will tell. And we hope that they do. As of June 2021, things are re-opening, and the masks are coming off as vaccination rates rise.

An Implosion Like No Other

At that time, the New York Times called the company’s failed effort to go public and related turmoil, “an implosion unlike any other in the history of startups”.

This is attributed to the founder and CEO, Adam Neumann’s controversial tenure and the easy money previously provided to him by SoftBank.

Controversy Around CEO Adam Neuman

Shortly after, company co-founder Adam Neumann resigned from his position as CEO. In doing so, he gave up majority voting control in WeWork.

A few weeks later, The Wall Street Journal reported that Neumann would receive close to $1.7 billion for stepping down. 

Apparently, stakeholder SoftBank coughed up the funds. In exchange, SoftBank paid Adam a $185 million “consulting fee” and gave him a credit line of $500 million.

Furthermore, Neumann would have the right to sell close to $970 million of his WeWork shares to SoftBank once the deal closed. 

Who Is Adam Newman?

On a personal front, Newman was viewed by many as reckless. He not only mixed business with pleasure, but he also flaunted it.

Many investors questioned his motives after the WSJ scathing report on his outlandish behaviors. With only a few months away from being valued at $47 billion, his office-rental giant WeWork was the next Facebook. Unfortunately, his late-night and day, tequila-infused antics caught up with him. According to the Times, his private jet was once recalled after the flight crew found marijuana stuffed in an onboard cereal box.

To make matters worse, he is said to have leased back his own buildings to WeWork. And worse yet, he even charged WeWork $5.9 million for the “We” trademark. 

SoftBank Abruptly Walks Away From a $3 Share Purchase Agreement

A rough 2020 for WeWork got even rougher on April 2nd when Japanese conglomerate SoftBank announced its decision to claw back a $3 billion share buy offer. If completed, it would have given SoftBank control of the struggling office space startup. 

SoftBank said the offer to buy WeWork shares could not close because certain conditions had not been met. For starters, WeWorks failure to obtain antitrust approvals. Interestingly enough, Neumann is reportedly under investigation by the New York State Attorney General over allegations of self-dealing. 

Interestingly enough, SoftBank said stock belonging to Mr. Neumann and Benchmark made up more than half of the stock submitted into the offering.

This also means that Neumann will lose an opportunity to sell close to $970 million of his own shares to SoftBank as part of the now terminated deal. 

WeWork Sues SoftBank

In light of this, WeWork sued SoftBank – their largest shareholder over their decision to walk away from the stock deal. 

In light of that, WeWork stock is going to have trouble. Suing your largest shareholder is most likely going to scare other potential investors away.

Is WeWork a Unicorn?

Is WeWork a unicorn stock? They were touted as the new up and coming techy way to do real estate. It was hot. It was different and it’s done. At least for now. We’ll have to watch and see if WeWork stock comes to fruition. 

What’s Happening With WeWork Stock Now?

As you know, WeWork leases large amounts of space in office buildings. But, this has all come at the cost of billions of dollars.

WeWork’s financial burdens were expected to go up this year due to their breakneck expansion and commitment to leases they already signed.

Coupled with the pandemic this year…WeWork’s buildings have been virtually empty. All of this raises questions about demand for its locations when the pandemic is brought under control.

WeWork Is Trying to Get Their Financial House in Order

To appease its investors, in March, SoftBank said it would sell assets worth up to $41 billion. They plan to buy back $18 billion worth of shares and pay down debt.

Despite this, WeWork’s bonds have plunged in value and trade at levels that imply investors think the company could default on them. 

What Is WeWork Stock Worth Now?

Before the collapse, Softbank had agreed to buy shares from WeWork’s employees and investors for $19.19 per share.

But, in November, WeWork set a price of $4.12 per share for employees’ stock options, according to Bloomberg.

WeWork Staff and Shareholders

An IPO coupled with the multibillion-dollar stock transaction SoftBank agreed to with WeWork would have provided the seed money for many to buy homes and start businesses.

However, for WeWork staff and investors, those opportunities evaporated with little forewarning. All of this came as a shock to shareholders who had already begun laying the foundation for their new lives.

WeWork Alternatives

There are many alternatives in the REIT space. Check out these five commercial real estate stocks: $HIW, $CUZ, $PDM, $DEI and $KRC. These are some of the strongest stocks in this sector during May 2020, according to StockRover’s research analysis.

WeWork Stock Alternatives

Where to Go From Here?

Will we see WeWork stock in 2020? If you’re anything like me, I’m curious to see what is going to happen to WeWork in 2020. 

Amidst the controversy, there’s a lot of WeWork staff who planned their lives around a stock deal that just collapsed. For that, I feel for them. 

Will WeWork recover from this implosion and attempt another IPO? Your guess is as good as mine. 

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