In 2019, WeWork published an investment prospectus that would be the beginning of the end for the coworking firm as it was once known.
Now, as part of its second attempt to go public via merging with SPAC BowX Acquisition, the company has released another prospectus that offers a grim picture of what Mathrani had to clean up when he took over as CEO.
For instance, the $15 million that WeWork invested since its inception was essentially wasted on pointless mergers and acquisitions. Just one example of many is WeWork’s purchase of online facilities management platform Managed by Q years ago for $190 million, which was then sold off for just $28 million.
But it’s biggest problem was its desire to expand at rapid speed, leaving it incredibly vulnerable once the pandemic hit. Membership rates fell 26% last year to around half a million and the company cut its headcount by 70%, leaving it with just 5,200 employees.
Additionally, it has exited over 100 leases. Despite this, it still has $41 billion in future lease liabilities.
If any lesson should be taken away from the tumultuous Neumann-era WeWork, it’s that a large checkbook does not equate to a high valuation.