WeWork’s Demand Surpasses Pre-Pandemic Levels, Chairman Says
Demand for coworking space at WeWork locations has recovered, according to WeWork Executive Chairman Marcelo Claure, with inquiries from potential customers exceeding pre-pandemic levels. Claure, who is also SoftBank Group chief operating officer, made the comment during an interview at the Bloomberg Businessweek virtual summit.
“Sales are back to pre-pandemic levels, and our sales pipeline is strong," a spokeswoman told Bloomberg by email afterward.
The comments came in the wake of WeWork CEO Sandeep Mathrani's assertion during a May 11 Wall Street Journal podcast interview that "those who are least engaged are very comfortable working from home,” a comment that Mathrani has since apologized for.
WeWork is seeking to go public through a merger with a special-purpose acquisition company, BowX Acquisition Corp., a process that has raised a few eyebrows. In pitching the merger to potential investors, WeWork used projections and financial calculations that reminded some of the talking points that inspired investors to reject the company's 2019 IPO prospectus when Adam Neumann ran WeWork.
WeWork's pitch this time around asserted that the company has over 850 locations and 450,000 memberships, numbers that seem to include WeWorks in China and India, which aren't part of the entity attempting to go public. Another possible sticking point is how WeWork calculates profitability.
“With a new management team in place, WeWork spent the last year working diligently to improve the fundamentals of the business with a renewed commitment to ensuring our financial disclosures," WeWork said in a statement to Bisnow in April, refuting the characterizations of its financials as misleading.
Mathrani has sketched out a plausible path toward profitability, writes Chris Bryant in a Bloomberg opinion piece, asserting that the new chairman had a "big mess" to clean up after taking the company's reins.
"What jumps out most from the new prospectus is how much of the $15B WeWork had 'invested' since inception was wasted, especially on frivolous M&A and big payouts to some of the executives involved," Bryant wrote.