WeWork published its hotly anticipated prospectus on Wednesday, as the lossmaking property group races to complete an initial public offering that will see it raise billions of dollars to fund its global expansion

The publication comes months after The We Company, WeWork’s parent group, filed its IPO paperwork confidentially with the Securities and Exchange Commission, and sets the stage for a stock market debut as soon as September. The group is hoping to raise between $3bn and $4bn through the IPO, according to people briefed on the plans, which would rank it as one of the largest new public listings this year.

The documents revealed the financial toll of WeWork’s rapid global expansion. The company generated a net loss of $905m in the first six months of 2019, compared to $723m in the same period a year ago. It said $215m of its loss so far this year was attributable to other investors who have funded its growth in Asia.

Revenues more than doubled in the first half of the year to $1.54bn and the company said that large companies were accounting for a larger portion of its growing membership base, which now numbers 527,000.

The company was last valued at $47bn by the Japanese telecoms and technology group SoftBank, its largest investor. However, WeWork is not expected to clinch that same valuation when it floats publicly. Some early investors have marked their shares down or cut their stakes this year.

After successive infusions of capital from private market investors, notably SoftBank, WeWork and its co-founder and chief executive Adam Neumann are testing public appetite for the business model offering shared office space on flexible terms.

“We are reinventing the way people work and transforming the way individuals and organisations relate to the workplace,” the company said in the filing. “When we started, it was obvious to us that the solutions available in the market were not meeting the needs of the modern workforce.”

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The listing is being finalised at the same time WeWork attempts to sew up another $6bn financing package. That part of the fundraising is to take the form of asset-backed loans, with a portion of it contingent on the expectation that WeWork will raise at least $3bn from its IPO. 

The We Company did not say how many shares it planned to sell or at what price it would list its stock. The group will list its class A shares under the ticker WE.

WeWork has grown rapidly since its founding by Mr Neumann and Miguel McKelvey nearly a decade ago in New York’s SoHo district. It now counts more than 520 offices across 111 cities. In the process, it has become the largest tenant in New York and is one of the biggest in London.

Mr Neumann has drawn investor scrutiny over share sales and loans against his stake in the company ahead of the IPO, as well as his ownership of some of properties where WeWork was a tenant. He is expected to maintain voting control of the group through the group’s dual-class share structure despite owning a minority stake in the company.

The company has turned to a complex corporate structure for its listing that hands tax benefits Mr Neumann and some other early investors in the office space provider, as the Financial Times first reported last week. The arrangement, known as an umbrella-partnership corporation, allows investors in the IPO to buy shares in a holding company that owns a stake in WeWork’s underlying businesses. 

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WeWork accelerated the plans for its listing this summer as an intensifying trade war between the US and China caused global stock markets to gyrate. Senior executives at WeWork are keen to complete the IPO while US stocks remain near record highs, people with knowledge of the matter said, given concerns that global growth could slow in 2020.

Via Financial Times