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Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>WeWork and Bow Capital SPAC (BOWX US) announced agreement on a SPAC merger that would allow WeWork to reach public markets in Q3 21 at a suggested post-money enterprise value of $9bn. Expectations for a deal of this magnitude have been well-telegraphed so the announcement is not a surprise whilst, since it is a SPAC deal, a lack of financial statements/history isn’t either. We do know how the $9bn value is being justified and it is a bit of a stretch: markets need to believe WeWork can double its in-office user base and triple overall users, even as ARPUs rise and the absolute level of operating costs declines. Meanwhile, the only public comparable <a href="https://www.smartkarma.com/entities/iwg-plc" target="_blank" data-smartkarma-citation="entities:28219:1" rel="noopener">IWG PLC (IWG LN)</a>  is roughly the same size with the same resources but has yet to recover value lost to the pandemic.</p>

WeWork and Bow Capital SPAC (BOWX US) announced agreement on a SPAC merger that would allow WeWork to reach public markets in Q3 21 at a suggested post-money enterprise value of $9bn. Expectations for a deal of this magnitude have been well-telegraphed so the announcement is not a surprise whilst, since it is a SPAC deal, a lack of financial statements/history isn’t either. We do know how the $9bn value is being justified and it is a bit of a stretch: markets need to believe WeWork can double its in-office user base and triple overall users, even as ARPUs rise and the absolute level of operating costs declines. Meanwhile, the only public comparable IWG PLC (IWG LN)  is roughly the same size with the same resources but has yet to recover value lost to the pandemic.

WeWork - Still Asking for Way More than They Are Worth