What’s happening: Shares of the flexible office space provider are set to begin trading on the New York Stock Exchange on Thursday under the ticker “WE.”
But it’s a different deal, a different world — and a very different WeWork.
Then: Initially, WeWork followed a traditional IPO. Bankers were expected to provide the company with an attractive valuation. At its peak, private investors believed WeWork was worth $47 billion.
Now: Thursday’s listing follows a merger with Bowex Acquisition Corp., a special purpose acquisition company, or SPAC. The deal values WeWork at approximately $9 billion.
WeWork’s corporate governance also came under the microscope when it was revealed that co-founder and then-CEO Adam Newman had wielded enormous voting power, giving him extensive control over the direction of the company.
Yet the company is still losing money. After the SPAC deal, which will raise $1.3 billion, Newman will have about 11% of the voting power.
Columbia Business School professor Len Sherman said taking the SPAC route allows WeWork to avoid the scrutiny it has done in the past.
“The advantage of offering SPAC is that it gives WeWork the ability to create fast-forward growth projections that would not be allowed under traditional IPO regulatory rules,” he told me.
Then: What is covid-19?
Now: The pandemic has dramatically changed the office space market as more people work from home.
“We think working from home reduces office demand by about 15%,” Daniel Ismail, principal analyst at Green Street’s office team, told me. “It’s a real paradigm shift.”
However, it’s not all bad news for WeWork. Ismail thinks companies will want more flexible office agreements as workers step back, and would favor signing a one- or two-year contract with a firm like WeWork rather than locking in longer leases of eight to 10 years’ duration. .
He predicts that the flexible office market, which currently accounts for just 2% of total office inventory in the United States, could reach 10% by the end of the decade.
That said: Shares of IWG, which Ismail said is WeWork’s main publicly traded competitor, are down 13% this year due to uncertainties.
One more thing: Newman is now infamous (he’ll be played by actor Jared Leto in the upcoming Apple TV+ series). But that’s not stopping them from celebrating WeWork’s delayed debut. The Financial Times reports that Newman will host a party with early staff at the Standard Hotel in New York on Thursday.
What’s a supply chain crisis? Tesla posts record quarter
Latest: The company reported another record quarter after US markets closed on Wednesday. Between July and September, it made a profit of $1.6 billion, a 389% increase from the same period last year.
Revenue up 57% compared to 2020, even as the company earned less from selling regulatory credits to other carmakers, who use them to meet environmental standards and avoid large fines .
Analysts warn that Tesla needs to rely less on that line of business, which is attractive but is expected to decline as competitors ramp up production of electric vehicles.
Tougher still: The company warned it was facing difficulties obtaining computer chips and other materials, even if it was able to address those issues in the third quarter.
Tesla previously disclosed record sales in the period, up 20% compared to the previous three months and 73% compared to a year ago.
“Due to part shortages and logistics variability, we are not able to keep our factories running at full capacity,” Chief Financial Officer Zachary Kirkhorn told analysts. “It’s important to note that while we’ve nearly doubled year-over-year deliveries, this has been exceptionally difficult to achieve.”
Kirkhorn said customers are waiting longer for vehicles and the backlog is growing.
“The only practical way to address this in the immediate term is to do whatever we can to build more cars on our existing production lines,” he said.
Investor Insight: Shares are down more than 1% in premarket trading.
Pinterest stock soars over PayPal takeover chatter
Bloomberg, citing people with knowledge of the matter, said the deal could be worth $45 billion, making it the biggest tech deal of the year. Reuters and the Wall Street Journal have also reported PayPal’s interest, citing sources.
Thinking: PayPal is making moves to become a “super app” in the vein of Alibaba’s Alipay and Tencent’s WeChat, which are huge in China. Last month, the company unveiled a new “all-in-one” interface that includes a high-yield savings account, a bill management system, and new shopping tools that allow customers to earn rewards.
Pinterest is also rolling out new features to make it easier to shop on its site and trying to promote its offerings for advertisers.
“There will be a huge swing to the potential deal [PayPal]but we think [the Pinterest deal] understandable in the context of [PayPal’s] Broader commerce push,” Barclays analyst Ramsey El-Asal told clients.
Pinterest is known as the feel-good corner of the Internet. But it doesn’t come without accessories. The company paid $22.5 million last year to settle a gender discrimination lawsuit brought by its former chief operating officer. It did not accept liability as part of the settlement.
- Preliminary US jobless claims for last week’s post at 8:30 a.m. ET.
- Current US home sales for September follow at 10 a.m. ET.
Credit : www.cnn.com