WeWork reports £2.31 billion of loss in 2020 on lower demand for office space
- WeWork reports £2.31 billion of loss in 2020 on lower demand for office space.
- The office sharing company wants to merge with BowX Acquisition Corp (SPAC).
- WeWork intends to go public at a valuation of £6.49 billion, including debt.
WeWork said on Monday that it concluded 2020 with a loss of £2.31 billion as the Coronavirus pandemic accelerated a shift to working from home. In the previous year, the office-sharing company had reported a higher £2.52 billion of losses.
WeWork’s parent organisation, SoftBank Group (TYO: 9984), opened at £65.09 per share on Monday and closed the regular session at a slightly higher £65.39 per share after touching an intraday high of £66.08 per share in the morning session.
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In comparison, SoftBank shares were seen trading at a much lower £17.81 per share in March 2020, when the ongoing health emergency was at its peak. Here’s what you need to know about how do people make money on the stock market.
WeWork expresses plans of going public
WeWork confirmed on Monday that it intends to merge with BowX Acquisition Corp (SPAC) to go public. The U.S. firm forecasts its initial public offering to be valued at £6.49 billion, including debt.
Before the start of 2023, the New York City-based company added, occupancy will recover to 90% of the levels seen before the pandemic. In comparison, occupancy stood at only 47% of the pre-virus levels at the end of 2020.
The COVID-19 crisis has so far infected more than 30 million people in the United States and caused over half a million deaths. In separate news from the U.S., aeroplane manufacturer Boeing said it entered into a £3.81 billion revolving credit agreement.
WeWork expects £349.81 million of adjusted EBITDA
According to WeWork, its earnings before interest, taxes, depreciation and amortisation (EBITDA) was expected to print at £349.81 million on an adjusted basis next year. WeWork refrained from commenting any further on its report on Monday.
WeWork had previously sued SoftBank Group after the Japanese multinational conglomerate pulled out of buying WeWork stock worth £2.16 billion from investors.
Earlier this month, however, an agreement was struck between the two companies that made SoftBank liable to cover Adam Neumann’s (Founder of WeWork) legal fees worth £36 million and pay another £36 million in non-compete fee. In August 2020, the American commercial real estate company secured £840 million of new financing from SoftBank.
SoftBank performed largely upbeat in the stock market last year with an annual gain of roughly 70%. At the time of writing, it is valued at £140 billion and has a price to earnings ratio of 12.22.