WeWork hit with big loss despite revenue jump
Suffers a dramatic reversal in fortunes since its $47b valuation at the start of the year
SAN FRANCISCO: WeWork posted third-quarter losses of $1.25 billion (Dh4.7 billion) despite the beleaguered office space start-up nearly doubling its revenue, US media reports said Wednesday.
The firm has suffered a dramatic reversal in fortunes since its $47 billion valuation at the start of the year.
In the last two months WeWork cancelled its IPO and pushed out co-founder Adam Neumann, albeit with a reported severance package of more than $1.5 billion.
The record-high loss was more than double the red ink logged over the same period a year earlier while revenue soared to $934 million, according to the Wall Street Journal, which cited a report to debt holders by parent company We Co.
Japanese conglomerate SoftBank Group will pump a total of $9.5 billion into WeWork and increase its stake in the firm from 29 per cent to around 80 per cent in an agreement announced last month.
SoftBank Group last week announced an operating loss of $6.4 billion for the third quarter, the worst in its history, as it took a hit from investments in start-ups including WeWork and Uber.
WeWork offers flexible and shared workspace arrangements, with operations in 111 cities across 29 countries.
To cut costs, the firm stopped construction of new buildings and is selling off some business units, according to SoftBank chief executive Masayoshi Son.