Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Capital Markets

WeWork continues to progress towards an IPO that could come as early as the end of this year. It had filed a confidential prospectus with the SEC already,  is reportedly in talks to buy in its India affiliate for $1.9bn,  and is also talking to banks to raise $3-4bn in debt funding to reassure potential equity investors it has sufficient resources to reach break-even.Whilst eye-popping operating losses have generated most of the headlines, we see a path to profitability over the mid-term. The main question is whether anticipated growth supports a valuation of $20-$47bn based on previous funding rounds. We think that even the bottom of that range is too high based on our own preliminary forecasts, which generate an equity value of $12bn whilst revenue multiples suggest a value of $9-22bn.In this report we talk about the sector opportunity, provide detail on our forecasts and valuation, and have included a list of suggested topics/questions for management. The company is reportedly considering an analyst day later this month in NYC, which could go some way in clarifying outstanding issues.

WeWork continues to progress towards an IPO that could come as early as the end of this year. It had filed a confidential prospectus with the SEC already,  is reportedly in talks to buy in its India affiliate for $1.9bn,  and is also talking to banks to raise $3-4bn in debt funding to reassure potential equity investors it has sufficient resources to reach break-even.Whilst eye-popping operating losses have generated most of the headlines, we see a path to profitability over the mid-term. The main question is whether anticipated growth supports a valuation of $20-$47bn based on previous funding rounds. We think that even the bottom of that range is too high based on our own preliminary forecasts, which generate an equity value of $12bn whilst revenue multiples suggest a value of $9-22bn.In this report we talk about the sector opportunity, provide detail on our forecasts and valuation, and have included a list of suggested topics/questions for management. The company is reportedly considering an analyst day later this month in NYC, which could go some way in clarifying outstanding issues.

WeWork: Even $20bn Is a Stretch Valuation - A Deep Dive and Closer Look at Investment Issues

Switzerland

IWG PLC operates as a holding company. The company owns and provides office space.

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IWG PLC (IWG LN)

WeWork: Even $20bn Is a Stretch Valuation - A Deep Dive and Closer Look at Investment Issues

WeWork continues to progress towards an IPO that could come as early as the end of this year. It had filed a confidential prospectus with the SEC...

Kirk Boodry

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