WeWork's Q3 net loss doubles to $1.7b amid failed IPO

SAN FRANCISCO • WeWork reported a net loss of US$1.25 billion (S$1.7 billion) in the third quarter, eclipsing its sales and more than doubling its loss from the same period last year.

The quarter coincided with a spending spree in anticipation of an initial public offering (IPO) that veered off the rails - a combination of events that nearly brought the firm down.

Revenue in the quarter was US$934 million, up from US$482 million a year earlier, but it failed to keep pace with the steeper losses, according to a document that was presented to bond holders on Wednesday.

In an e-mail to staff on Wednesday, WeWork co-chief executives Artie Minson and Sebastian Gunningham described the quarter as a "difficult chapter" for the firm and said they were developing a plan to "provide a clear path to profitability".

That will include sales of business assets and job cuts, they wrote. Dismissals have already begun and are expected to number in the thousands.

WeWork had always prized growth above profit but took the approach to another level on the eve of its expected IPO. The deal was set to raise at least US$9 billion for the business in a combination of equity and debt.

It was not until the final weeks of the quarter that WeWork realised how doomed its fund-raising plans were. Investors recoiled at its deep losses and flimsy corporate governance, and the company pulled its IPO prospectus.

BLOOMBERG