Abstract
In January 2021, Sandeep Mathrani, Chief Executive Officer of the troubled real-estate firm WeWork, was evaluating a merger offer from the BowX Acquisition Corporation, a Special Purpose Acquisition Company (SPAC) founded by Vivek Ranadivé of TIBCO Software. WeWork’s financial position remained precarious after a failed initial public offering in September 2019. The BowX transaction offered a different route for WeWork to become a publicly listed company and could potentially ameliorate its financing problems. However, the SPAC transaction posed risks and challenges. Should WeWork accept the offer from BowX? If yes, what safeguards should it negotiate to mitigate the risks?
Additional Information
| Product Type | Case |
|---|---|
| Reference No. | F&A0572 |
| Title | WeWork: Public versus Private Markets |
| Pages | 19 |
| Published on | Dec 8, 2023 |
| Year of Event | 2020-2021 |
| Authors | Agarwalla, Sobhesh Kumar; Varma, Jayanth R; Virmani, Vineet; |
| Area | Finance and Accounting (F&A) |
| Discipline | Finance, Strategic Management |
| Learning Objective | • Assess WeWork’s financing needs and design a suitable capital structure (debt versus equity) • Evaluate private and public capital markets as sources of equity capital for WeWork • Understand different routes to becoming a listed company—traditional IPO, direct listing, merger with SPAC—and the costs and risks associated with each method • Understand the risks in and advantages of a SPAC transaction • Design contractual protections to mitigate the risks in the SPAC transaction |
| Keywords | SPAC; Public Markets; Private Markets; Adam Neumann; WeWork; Initial Public Offering |
| Country | United States of America |
| Organization | WeWork |
| Access | For All |
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