Office sharing-startup WeWork had to report an unfortunate loss for its first-quarter result. The company’s restructuring in preparation for a public listing is suspected to attribute to the loss. Previously, the company has announced its plan to go public through a merger with a black-check firm, also known as a special purpose acquisition company (SPAC).
According to Reuters, the loss in the first quarter inflicted by the restructuring reached $2.06 billion.
However, WeWork might be able to breathe a little easier with a higher occupancy at 50% in the first quarter. In comparison, the occupancy for the fourth quarter was limited at 47%. The increase is suspected to come from the rising number of people returning to offices due to the easing of COVID-19 restrictions.
Due to the occupancy cut and increasing operating costs, first-quarter revenue for WeWork halved to $598 million from a year prior. Additionally, Reuters noted that WeWork said it had 490,000 members in the first quarter, compared to 693,000 in March 2020.
WeWork: going public as a solution
Investors have been raising concerns over WeWork’s business model and co-founder Adam Neumann’s management style. These concerns initiated the plan to sign up the company for a public listing back in 2019.
Last March, WeWork finally signed a deal valued at $9 billion with BowX Acquisition Corp for a merger to go public. SoftBank Group Corp believed the deal could retain a majority stake in the company after the merger.
Reuters also noted WeWork incurred restructuring costs of $494 million. The digit came from Softbank’s non-cash stock purchases and a settlement with Neumann. Accordingly, WeWork reported an impairment charge of $299 million. This was partly due to an exit out of some real estate.
Read also: WeWork Also Relies on a SPAC for Upcoming IPO
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