WeWork submits IPO plan, showing $690 million loss in first half

WeWork disclosed its plans for an IPO, revealing a net loss of $690 million in the first six months of the year as it moves towards a listing.

The office rental company listed an offering size of $1 billion in its filing to the US Securities and Exchange Commission. That amount is typically a placeholder that will be revised when terms of the share sale are set later.

The filing revealed that investment banks JPMorgan Chase & Co and Goldman Sachs Group will be the lead underwriters on the offering. Executives from major banks had been courting the company for years.

Its 2018 revenue more than doubled to $1.8 billion in 2018 compared to $886 million in the previous year. The company plans to list its shares on the under the symbol “WE”, although the exchange was not listed in the filing.

WeWork had been targeting a share sale of about $3.5 billion in September, people familiar with the company’s plans have said. 

That would make it the second-biggest IPO of the year, topped only by Uber Technologies Inc.’s $8.1 billion listing in May. In parallel with the stock offering, WeWork has been in talks to raise as much as $6 billion in debt.

New York-based WeWork, which leases office space to companies and freelance workers, has raised more than $12 billion in funding since its founding. SoftBank Group Corp. is the company’s largest backer and has valued the unprofitable business at $47 billion. WeWork is by far the most valuable co-working business, but numerous rivals around the world are trying to lure away members.

Adam Neumann, the chief executive officer, faces persistent questions about WeWork’s propensity to burn cash. The company has described some of its more scrutinized expenses, like a flashy contest series that cost more than $40 million, as “critical means through which we express our key values.” WeWork said in April that it had submitted its paperwork confidentially to US regulators. Leading up to its public filing, WeWork discussed its business with analysts on July 31.

WeWork has in recent weeks been looking to raise a significant amount of debt. It was seeking to borrow $2 billion through a letter-of-credit facility and $4 billion with delayed-draw term loan, Bloomberg previously reported. Banks will have to make good on their commitments only if at least $3 billion is raised in the IPO.