After over a year of trying to remedy its tarnished reputation, WeWork will be going public by merging with special purpose acquisition company (SPAC) BowX Acquisition Corporation.
The coworking company’s first attempt to go public failed, but this time it is being led by real estate veteran and CEO Sandeep Mathrani, who claims that the organization will finally be EBITDA profitable by the fourth quarter of this year.
However, this is not the same as total profitability since EBITDA indicates a company’s earnings before interest, taxes, depreciation and amortization.
This news follows WeWork’s challenging year due to the pandemic, which led to skyrocketing vacancy rates. In fact, in order to be profitable in the timeline it has set, WeWork would need its occupancy levels to grow from 47% to 75% by the end of the year.
While the firm can anticipate this growth by focusing on companies who are rethinking their workplace strategies and showing interest in flexible workspace for their newly adopted hybrid models, deals have not been signed yet.
“It feels a bit aggressive,” said Barry Oxford, an analyst at D.A. Davidson. “If you were to compare between a best-case scenario, a normal scenario, and the worst-case scenario, it feels like they’re showcasing the best-case scenario.”
While the company’s projections reflect some of the analysis that has come out about the return to the office, companies are still wrestling with the best post-pandemic workplace solutions.
For WeWork in particular, they will continue to target larger corporates moving forward, which currently makes up 50% of their business.