WeWork posts net loss of $888.85 million in Q2 2021 – ET RealEstate

BENGALURU: Office-sharing startup WeWork reported on Friday a dip in its second-quarter revenue from the prior quarter, as the emergence of the Delta coronavirus variant stoked a slower-than-expected recovery for the first half of the year.

The company, which is backed by Japanese conglomerate SoftBank Group Corp, said the health crisis dampened its expectations for a rebound in average revenue per member, particularly in the United States and Canada, for 2021 and 2022.

The fast-spreading variant and the subsequent tightening of curbs in some places have compounded worries for office space providers, as businesses opt for shorter leases and many employees continue to work remotely.

WeWork said it had 517,000 members in the second quarter ended June 30, a drop from 612,000 in the year-ago period.

The hybrid-work strategy will help improve sales, the company said, adding that it still expects preliminary July revenue to come in at about $215 million, with $650 million to $700 million sales for the third quarter.

In a hybrid workplace model, employees have the ability to work in different spaces, including corporate offices, coworking spaces, public areas and from home.

WeWork in March agreed to go public through a merger with BowX Acquisition Corp, a special purpose acquisition company, in a deal that valued it at $9 billion. SoftBank said it would retain a majority stake in the company after the merger.

Net loss attributable to WeWork was $888.85 million in the second quarter, compared with $863.83 million a year earlier.

Quarterly revenue dipped nearly 1% to $593.48 million from the first quarter.



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SoftBank-backed WeWork to begin accepting payments in cryptocurrencies – ET RealEstate

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BENGALURU: SoftBank-backed office-sharing startup WeWork said on Tuesday it would begin accepting payments in select cryptocurrencies and partner with Coinbase Global Inc and payment app Bitpay to facilitate transactions.

WeWork joins a clutch of high-profile firms that have dived into the digital currency space recently, including Tesla Inc , Visa Inc, Bank of NY Mellon, prompting the move away from the fringes of finance for crytocurrencies like bitcoin.

Visa Inc said last month it would allow payment settlements using cryptocurrency while PayPal Holdings Inc launched a crypto checkout service on March 30.

Bitcoin, the biggest crytocurrency, reached a record high last week, ahead of the trading debut of U.S. crytocurrency exchange Coinbase, but its rally has since cooled off.

The multi-fold rise in the value of cryptocurrencies has also been driven by investors seeking high-yielding assets amid low interest rates.

Earlier in the day, PayPal-owned peer-to-peer payment service Venmo said it had started allowing users to buy, hold and sell cryptocurrencies on its app.

WeWork agreed to go public late last month through a merger with a blank-check firm in a deal that values the start-up at $9 billion. SoftBank Group Corp said it would retain a majority stake in the company after the merger.



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SoftBank reaches settlement with former WeWork CEO Adam Neumann – ET RealEstate

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BENGALURU: SoftBank Group Corp said on Friday it has reached a settlement with WeWork‘s special committee and the company’s co-founder and former chief executive, Adam Neumann, putting to rest a legal battle dating back to 2019.

SoftBank, the new owner of the office-sharing firm, did not disclose terms of the settlement. Media reports earlier this week indicated the deal includes a nearly $500 million cut in Neumann’s payout from SoftBank.

The legal tussle between SoftBank and Neumann started in 2019, when SoftBank agreed to buy around $3 billion in WeWork stock belonging to Neumann as well as current and former WeWork employees. SoftBank later contested its obligation to purchase the shares.

Under the new settlement, SoftBank will purchase around half the shares it had originally agreed to buy, a source familiar with the talks had told Reuters on Monday.

The settlement is also expected to clear the decks for WeWork as it reportedly pursues a public listing by merging with a special purpose acquisition company (SPAC).

“This agreement is the result of all parties coming to the table for the sake of doing what is best for the future of WeWork,” said Marcelo Claure, executive chairman of WeWork and CEO of SoftBank Group International.

SoftBank, which poured more than $13.5 billion into WeWork, was pulled into the legal dispute with directors at WeWork after backing out of the $3 billion tender offer agreed when it bailed out the office-sharing firm following a flopped IPO attempt.



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WeWork sells control of China unit to Trustbridge Partners – ET RealEstate

BENGALURU | SHANGHAI: U.S. office-sharing firm WeWork on Thursday said it will sell control of its China division to one of its investors – private equity firm Trustbridge Partners – as it steps back from a competitive market where it has suffered low-occupancy rates.

The deal effectively offloads the China unit away from the parent, which has faced fundraising issues since a failed attempt to go public in 2019.

WeWork said it will maintain a minority stake and “participating interest.” Concurrent with the deal, the division has received $200 million in funding from existing investors.

Michael Jiang of Trustbridge Partners will serve as WeWork China‘s acting chief executive officer.

Trustbridge and Singapore state investor Temasek Holdings (Private) Ltd held talks with WeWork’s Chinese unit over increasing their stakes and taking majority ownership, Reuters reported in January.

WeWork shelved its initial public offering in 2019 after investors grew wary of its losses, business model and corporate governance, leading to the resignation of co-founder and former chief executive officer Adam Neumann.

It has since undergone significant management change yet remains enmeshed in lawsuits over a $3 billion tender offer to existing shareholders.

Last month, the New York-based startup said it had almost halved its cash-burn rate from the end of last year and obtained a $1.1 billion commitment in new financing from Japan’s SoftBank Group Corp.

SoftBank, meanwhile, has been steadily offloading assets to raise money after a spending spree late last decade. This month, it said it would sell chip designer Arm Ltd, purchased in 2016, to semiconductor giant Nvidia Corp for $40 billion.



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