The company - which changed its name to We Co.in a diversification move this year - has in recent weeks been looking to raise a significant amount of debt.
We Company co-founder Rebekah Neumann, Adam Neumann's wife who is the company's chief brand and impact officer, will pick his successor if he dies or is permanently disabled in the 10 years following the IPO, alongside two company board members.
The filing with the U.S. Securities and Exchange Commission underscores We Company's rapid growth but also the billions of dollars it is investing to fund its expansion. On the other hand, many investors have overcome their concerns about founders retaining a tight grip on fast-growing startups, because of fear of missing out on potentially lucrative returns. Among the Asian markets, the share of the management fee WeWork gets in India is highest at 12% of the revenue. "What if there's a dispute between them?" he said. "We all know a recession is going to happen, it's just a matter of, will they be prepared for that?" In 2018, it became the largest tenant in its homebase of NY. Today, the global platform integrates space, community, services and technology in over 528 locations in 111 cities across 29 countries. And that's despite it generating more revenue than WeWork and making a profit.
"Average revenue per WeWork membership has declined, and we expect it to continue to decline, as we expand internationally into lower-priced markets", the company said in the filing. During the first six months of this year, the company generated $1.5 billion in revenue - but lost $905 million.
The dot com boom-and-bust of the 1980s was epitomized by tech companies that didn't really have a product that was tangible: nebulous claims abounded around investment vehicles that never amounted to much.
"At the time of our rating back in April 2018, we thought that the company would be able to attain normalized profitability within a couple-of-year horizon", analyst Kevin McNeil said.
The company on Wednesday released the financial paperwork for its planned initial public offering of stock. Unlike tech companies, it invests relatively little in R&D (what is there to research?), its investments in property and equipment are in bricks-and-mortar, refurbishment and building infrastructure (not server farms and the like), and its direct costs accounted for 84 percent of total revenue past year.
In the first half of this year, WeWork's "location operating expenses" grew to $1.2 billion compared to the $636 million it spent during the same period last year. However, an anonymous source told the Wall Street Journal that Neumann's borrowing against his stake proves he is confident in the co-working giant's long-term success.
Other landlords are more comfortable with the risk of a WeWork tenancy.
We also can not stress enough how much WeWork is dying to mimic the office spaces of Google, Facebook, Microsoft and similar moneybags operations, even though it has nothing like the tech giants' level of income and capital expenditure.
WeWork noted that it studied the recession of 2008 extensively, but the company has yet to face a global downturn.
The company right now is eking out a slim base profit simply from the revenue it takes in minus the bare minimum costs to run its buildings. The company said it spent more than $40 million on the show in 2017 and 2018.
But there is still a chance that WeWork's stock could sizzle. Zoom, a smaller video conferencing startup that is profitable, has soared.
WeWork, which says in the offering document that its corporate mission is no less than to "to elevate the world's consciousness", is on track to lose $2.7 billion this year from its operations, up from almost $1.7 billion last year.