WeWork lost $1.25 billion in the three months that ended in September, up from $497 million in the same period a year earlier. The numbers show why WeWork's planned initial public offering became a spectacular flameout
The rapid expansion of WeWork’s office-space empire caused the company’s losses to more than double in the third quarter, according to a company presentation.
WeWork lost $1.25 billion in the three months that ended in September, up from $497 million in the same period a year earlier, according to the document, obtained by The New York Times. Revenue increased about 94%, to $934 million.
The numbers show why WeWork’s planned initial public offering became a spectacular flameout. The company was forced to withdraw the offering in September after investors grew nervous about the company’s finances and its unusual corporate governance. Adam Neumann, its co-founder, stepped down as chief executive under pressure.
Vicki Bryan, chief executive of Bond Angle, a research firm, said WeWork should have told investors during the IPO process that losses were escalating in the third quarter. “They knew the bulk of this and kept the public in the dark,” she said.
WeWork leases office space, refurbishes and then rents it out to its customers. In the belief that there is a growing appetite for such space, it has added hundreds of new locations around the world. But doing so has cost hundreds of millions of dollars.
At the end of September, WeWork’s presentation said, the company had $2 billion in cash, a number that included $692 million of restricted cash. That sum compares with slightly over $3 billion in total cash at the end of June, implying the company used $1 billion of cash in three months. The document did not, however, provide a cash-flow statement that would show exactly how much cash the company spent in the quarter.
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