WeWork Weighing Offers To Go Public With SPAC, Including One Run By An NBA Owner

A Wework Office At 125 West 25Th St. In The Flatiron District In New York.

After its first attempt to go public turned disastrous, WeWork may be trying another route.

The coworking name brand is considering the use of a special purpose acquisition company to hit the public market and is weighing offers from multiple companies that could value WeWork at $10B, The Wall Street Journal reports. WeWork has also received offers for a new round of private funding, and no decision is imminent.

Among the SPACs, also known as blank check companies, looking to acquire WeWork is one formed by Bow Capital, which is run by Vivek Ranadivé, the owner of the NBA's Sacramento Kings, the WSJ reports. Bow Capital's SPAC raised $420M last year, part of an explosion of the usage of such companies in real estate and in general. That rate has only increased in early 2021, with new SPACs being formed at the rate of five per day, data firm SPAC Research told the WSJ.

SoftBank Group, the Japanese finance giant that owns a majority stake in WeWork after driving its voracious spending then bailing it out after the failed 2019 IPO, formed its own blank check company last year, but so far its SPAC has not been connected with WeWork. SoftBank's most recent capital infusion was $1.1B in senior debt, taking its total investment into the company over $11B. In the first months after the outbreak of the coronavirus pandemic, SoftBank wrote down WeWork's value to $2.9B, the WSJ reports.

In its most recent financial update, WeWork reported third-quarter revenue of $811M, an 8% drop from Q2, while spending $517M of its cash reserves. Though it still had about $3.6B left in those reserves at the time, its burn rate and the overall coworking market's struggles led credit rating agency Fitch to mark WeWork as at serious risk of default. A couple of months earlier, WeWork CEO Sandeep Mathrani claimed that the company was on track to become profitable by the end of this year.

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