WeWork Explores Fresh Equity Raise Amid Stock Slump

(Bloomberg) -- WeWork Inc. is in discussions to raise new equity, according to people with knowledge of the matter, after the co-working company's shares fell by more than half since its October public debut. The stock plunged to a record low on the news.

The talks were kick-started by investor interest, said one of the people, who like the others requested anonymity discussing private plans. The capital raise may be structured as a so-called private investment in public equity, or PIPE, some of the people said. New York-based WeWork is looking at bringing in more than $200 million, another person said.

WeWork's debt indentures show there are restrictions on the company's ability to raise new borrowings, people with knowledge of the matter said. The firm has no plans to take on new debt, another person said.

A transaction, if agreed, could be unveiled with the company's fourth-quarter earnings announcement, which is set for March 11, one of the people said. No decisions have been finalized.

“The company has no plans to issue additional equity at this time,” WeWork said Friday in a statement after the close of regular New York trading. “Our liquidity at the end of the third quarter stands at $2.3 billion.”

Led by Chief Executive Officer Sandeep Mathrani, WeWork made its public markets debut in October following a merger with special purpose acquisition company BowX Acquisition Corp. The shares plunged as much as 24% Friday to $4.66, a record low.

WeWork, which has announced Ukraine relief efforts, has no plans to pause its Russian operations, Mathrani said in a Bloomberg News interview this week. Other U.S. companies including Airbnb Inc. have suspended business in Russia since the invasion of Ukraine.

WeWork said in November it had pro forma cash and unfunded cash commitments of $2.3 billion, including $477 million of available cash on hand as of Sept. 30.

Fitch Ratings in October said WeWork had $669 million of principal outstanding on its May 2025 senior notes, as well as $2.2 billion in senior unsecured notes maturing in 2025 and $550 million in senior secured notes expiring in 2023.

“WeWork remains subject to risk that it is unable to access markets to meet liquidity needs to the extent its funding requirements exceed the proposed financing,” Fitch said.

WeWork's funding obtained through the SPAC transaction included an $800 million PIPE. Among investors were Insight Partners, funds managed by BlackRock Inc. and Starwood Capital Group, Fidelity Management & Research Co. and Centaurus Capital.