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WeWork’s Losses in 2021 Reach $4.4B, With Revenue Falling By 25%

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Last Friday, WeWork released its financial results for the fourth quarter and fiscal year ending on December 31, 2021. According to MarketWatch, WeWork reported a 2021 loss that widened to over $4.4 billion, although the losses narrowed sequentially after a significant $20 billion loss in the first quarter of the year.

The reported $4.4 billion loss, or $18.38 a share, is in comparison to 2020’s numbers when the coworking giant witnessed a loss of $3.13 billion, or $22.24 a share. The per-share loss narrowed because the number of shares outstanding nearly doubled to 263.6 million shares from 140.7 million shares.

Revenue in 2021 fell to $2.57 billion, a 24.8% loss. Despite these unpromising numbers, occupancy during the fourth quarter of 2021 was 66%, up from 60% in the third quarter. 

The company expects 2022 consolidated revenue to increase to between $3.35 billion and $3.50 billion, including revenue of between $740 million and $750 million in the first quarter and between $775 million and $825 million in the second quarter. If these projections hold, this would amount to a 30% to 36% rise from its 2021 revenue.

WeWork went public in October last year after a near two-year struggle and is now pushing to redeem itself from bad publicity surrounding the perceived excesses and missteps of founder Adam Neumann, who was ousted as CEO. 

Neumann, 42, still owns 10% of the company, but holds no control after giving up his voting rights as part of a $1.7 billion exit package that SoftBank negotiated in its bailout of WeWork.

Under the terms of the deal, SoftBank can now invite him to rejoin WeWork’s board as an observer only, after a one-year ban expired last month — but given the circumstances of Neumann’s departure, this seems unlikely.

Since going public, WeWork’s stock has plunged nearly 50%, but the latest financial report showed the company’s shares rising 1.5% in morning trading on Friday.

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To rectify this drastic plunge, Bloomberg reported last week that WeWork may be in talks to raise new equity, which would be structured as a private investment in public equity, or PIPE, that could amount to nearly $200 million.

Although the Covid-19 pandemic has largely benefitted flexible office providers as companies look to offer employees an alternative place to work other than their homes, it is clear that WeWork is still very much in the recovery phase. 

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