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Flex office provider WeWork (WE) continues to lose money

By Daniel Tyson

16:20, 15 November 2021

Door to a WeWork location
Flex office company WeWork has struggled during the pandemic - Photo: Shutterstock

Flex office provider WeWork showed massive losses during its first quarter as a publicly traded company, recording a net loss of $802m (£597.16) but an improvement over third quarter 2020’s loss of $941m.

However, during a conference call, company leaders said leasing activities increased during Q3, a sign it's positioned for better earning results as the office space markets bounce back after being nearly decimated by the pandemic.

However, the company’s gross revenues declined to $661m during the quarter, down from $811m the same period last year. The company said losses shrank by slashing expenses.

The company reported adjusted EBITDA losses of $356m for the quarter, a $93m improvement compared to Q2 2021 when adjusted EBITDA losses of $449m.


WeWork went public in October, after being on the cusp of bankruptcy and cancelling its initial public offering. In 2018, WeWork was bailed out by the Japanese conglomerate SoftBank, now its largest shareholder. The special purpose acquisitions company (SPAC) is known as BowX Aquistions.

According to a company release, the company operations went through $1.5bn of cash during the first three quarters, but company officials said the cash drain is slowing. In Q3, operations spent $380m, less than $618m it spent during Q2. After the SPAC, it has $1.3bn in cash, including $477m available.

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High expectations

In 2019 WeWork was the darling of Wall Street. It had a valuation exceeding $47bn with customers that included Apple, Facebook and Google. The company experienced rapid growth during the period, but also chalked up massive losses. Many of its 762 global locations were populated only by empty desks.

Yet, the once most-valued start-up nearly collapsed under questionable leadership and uncertain finances, which led to the IPO being cancelled. For the next couple of years, the company struggled and finally went public in October.

Enter Cushman

WeWork received another lifeline last month when commercial real estate brokerage giant Cushman and Wakefield invested $150m in WeWork. The investment gives the brokerage 15 million shares of WeWork’s Class A common stock.

Cushman said as the investment is common sense, as corporations start to bring employees who have been working from home during Covid back to flex workspaces.

Read more: WeWork set to go public on NYSE following successful vote

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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