WeWork IPO

WeWork, currently valued at around $47 billion, is expected to go public later this year. Find out how you can trade WeWork shares before and after the listing and read on to learn all about the ambitious initial public offering (IPO).

Call 1800 601 799 or email helpdesk.au@ig.com to talk about opening a trading account. We’re here 24hrs a day from 3pm Saturday to 9am Saturday (AEDT).

Contact us: 1800 601 799

WeWork IPO

WeWork, currently valued at around $47 billion, is expected to go public later this year. Find out how you can trade WeWork shares before and after the listing and read on to learn all about the ambitious initial public offering (IPO).

Call 1800 601 799 or email helpdesk.au@ig.com to talk about opening a trading account. We’re here 24hrs a day from 3pm Saturday to 9am Saturday (AEDT).

Contact us: 1800 601 799

Why trade WeWork's IPO with IG?

Speculate on WeWork

Take a position with our 'grey market' via CFD

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Buy or sell based on your prediction of WeWork’s market cap

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When could the WeWork IPO happen?

There is no confirmed date for the WeWork IPO. The company filed to go public in August 2019, but it is unclear exactly when the IPO will happen.

How to trade the WeWork IPO

If you want to trade the WeWork IPO, you can do so before and after the listing. Here’s how:

Before the IPO

IG will be offering a 'grey market' via CFDs before the IPO is held, enabling you to speculate on WeWork's market cap before it lists.

The price of our grey market is a prediction of what WeWork's total market capitalisation will be at the end of its first day of trading.

  • If you think it will be worth more than the price indicated, you can 'buy' the market
  • If you think that the price is an overvaluation, you can 'sell'

After the IPO

Once WeWork's IPO is completed, we will close the grey market and add the company to our share trading service.

This means you can:

What is WeWork likely to be valued at when it lists?

WeWork is likely to be valued at over $47 billion when it lists, as this was the last valuation the company received (in January 2019). The previous valuation was $20 billion (in July 2017), but increased significantly after a major investment from Softbank.

Why is WeWork listing?

WeWork is said to be listing to secure a financing package. In other words, it wants to raise capital and pay off its billions in debts. That’s because although WeWork’s revenue has increased over the past few years, so have its liabilities.

What is the outlook for WeWork?

Despite losing a lot of money, WeWork is still growing, so the outlook remains positive. The expected IPO might attract more high-profile investors, which will be good news for the business. Future plans include expansion to countries such as China.

WeWork's grey market

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WeWork grey market $1/$2 $10 10 25%

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What is WeWork’s business model?

WeWork’s business model is renting out shared workspaces to entrepreneurs, freelancers, small businesses and more. It rents spaces from property owners and then sublets them at a higher price. The price per space depends on the location. Further to the rental income, WeWork also makes money by providing additional services for a fee.

How has WeWork been performing

While WeWork has been performing quite well in terms of revenue production, debts have also increased over the past few years. In 2017, revenue surpassed $900 million, and this figure doubled to $1.8 billion in 2018. Debt increased from $933 million to $1.9 billion in the same period. WeWork’s employee head count has also reflected this rapid growth, increasing from 2200 in May 2017 to more than 11,000 in August 2019. Membership has also expanded as well – going from 130,000 members in May 2017 to more than half a million in August 2019.

Who are WeWork’s competitors?

WeWork has quite a few competitors, such as International Workplace Group (IWG), Servcorp and Knotel. Shared workspaces aren’t a new notion, as some of WeWork’s competitors have been around since 1978. IWG listed on the London Stock Exchange in 2000, and it is a constituent of the FTSE 250. Though it is larger than WeWork in terms of reach and locations, WeWork is expected to have a much higher market cap than its rival when it lists. Servcorp is listed on the Australian Stock Exchange (1999), while Knotel (founded in 2016) is not a listed company.

What sets WeWork apart from its competitors is its vibrant workspaces – it appeals to a different market, also offering lower prices per head in some cases.

WeWork key personnel

There are 13 key executives on WeWork’s management team.

Adam Neumann Co-founder and chief executive officer
Miguel McKelvey Co-founder and chief culture officer
Laurent Paris Chief technology officer
Joanna Lee VP marketing
Ed Granaghan Chief administrative officer
Prabhdeep Singh Global head of operations
John Reid-Dodick Senior VP Culture
Anthony Yazbeck Chief operating officer
Sebastian Gunningham Vice chairman
Ramin Bozorgzadeh Engineering director
Roee Adler Executive VP product management
Eugen Miropolski Chief product officer
Jen Berrent Chief legal officer

What was WeWork last valued at?

WeWork was last valued at $47 billion (in January 2019), after a major investment from SoftBank. The previous valuation (in July 2017) was $20 billion.

Our analysis on the WeWork IPO

WeWork provide co-working office space in 124 cities across the world and will soon make their debut on the US stock market. While its business model of renting buildings and subleasing space to tenants at a higher rate is not revolutionary, the company has grown at an astonishing rate which has captured the imagination of big investors, including SoftBank’s Vision Fund and Goldman Sachs.

WeWork CEO Adam Neumann believes the company is more than just an office space provider, claiming to be a pioneer of the sharing economy, connecting workers to office space and changing the way people work. In its recently published IPO prospectus, WeWork romantically stated that their mission was to 'elevate world consciousness'. In reality WeWork compete with other office space providers, including UK-listed holding company IWG which owns a suite of companies such as Regus and Spaces.

While high growth and a big-vision message has fashioned a multi-billion-dollar valuation, investors should be concerned with the rate at which WeWork is burning through cash to maintain its rate of growth. Last year, WeWork reported that for every $1 they earnt in revenue, they spent close to $2. Even Uber eats through its cash pile at a slower pace.

Although it is routine at this stage of the cycle to see firms go public without ever having a generated a profit, these are usually technology firms – which WeWork is most definitely not. Its IPO prospectus also lacks substance on how the company plans to achieve profitability in the future. WeWork is estimated to manage around 47 million square feet of office space, so based on its 2018 revenue, this translates to $38.77 in revenue per square foot. In comparison, IWG generate $59.39 per square foot whilst managing to be profitable too.

2018 data WeWork IWG
Revenue ($m) 1822 3385
Net income ($m) -1611 150
5-year revenue growth rate 122% 11%
Revenue / sq.ft $38.77 $59.39
Market cap ($bn) 25.0 4.6
Price/Sales ratio1 13.7x 1.4x

Source: Various

1WeWork P/S ratio based on a valuation of $25 billion. IWG P/S ratio is based on its current share price.

A major risk for WeWork is a turn in the property market. WeWork take out long-term leases on its properties and generally agree shorter-term contracts with its tenants. If property prices and market rents were to fall, its tenants could demand lower rents, thus creating a further mismatch between revenue and costs.

Valuations for WeWork were recently slashed to around $20-30 billion from a previous eye-watering $47 billion. A $25 billion valuation would still give WeWork a larger market cap than General Motors, Morgan Stanley or Micron Technology. If valued using the same price-to-sales ratio as IWG, its valuation would plunge to around $2.5 billion.

WeWork’s mission statement includes 'redefining success as personal fulfilment, not just the bottom line'. Investors should hope that this sentiment is not reflected in WeWork’s future income statements.

Who are WeWork’s investors?

WeWork has a number of global investors, including Greenland Holdings, JP Morgan, Hony Capital and SoftBank, who invested $4.4 billion in the business in 2017 and another $1 billion in 2018. Since 2010, WeWork has raised around $7 billion through its funding rounds.

How do IPOs work?

IPOs are released when a company decides to start selling its shares to the public. The company will decide how many shares it wants to offer, and the investment bank will decide on the initial price of the stocks based on supply and demand.

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Who set up WeWork?

Adam Neumann and Miguel McKelvey set up WeWork in 2010. The business is headquartered in New York, and currently has workspaces in more than 90 countries across the world.

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