Urban Ag Report
Ultimate magazine theme for WordPress.

Jim Cramer's first take: 'I would buy' WeWork today


CNBC’s Jim Cramer joins ‘Squawk Box’ to discuss WeWork’s debut via SPAC today. “There’s a lot of cities where WeWork works, so yes I would buy, especially now that Adam Neumann isn’t involved with the company,” Cramer says. To see the full interview with Cramer sign up for a free trial to CNBC Pro: https://cnb.cx/3B6nsRL

Shares of WeWork jumped as high as 12% midday on Thursday, as the company went public through a special purpose acquisition company more than two years after its failed IPO.

The stock is currently up more than 8%.

Get Great Deals Now

The office-leasing company scrapped plans for an IPO in 2019 after investors raised concerns over its business model and corporate governance and its founder and then-CEO Adam Neumann.

Plans for the merger with BowX Acquisition Corp. were first announced in March, in a deal that reportedly valued the company at roughly $9 billion.

The valuation is a sharp drop from 2019, when WeWork was initially valued at a steep $47 billion by SoftBank Group. Its valuation slowly lowered as news of the company’s finances unraveled and investor demand wained.

“You’ve said this is a story with drama,” WeWork Executive Chairman Marcelo Claure told CNBC’s “Squawk Box” on Thursday. “Sure, this is a story where a lot of people wrote documentaries that it was the end of WeWork. Well the resistance, the persistence of these people is incredible. This company is here, is stronger than ever, and no doubt that we’re going to be celebrating many more milestones.”

What went wrong

WeWork’s troubles began in August 2019, when the company’s IPO filing revealed it had lost $1.9 billion the previous year and was on track to run through remaining cash. A crippling report from The Wall Street Journal in September raised concerns over how Neumann managed the company, including possible illegal activities.

Neumann stepped down as CEO that month. CNBC reported in October that he would get a package worth up to $1.7 billion to walk away from WeWork and give up his voting rights. Real estate executive Sandeep Mathrani later assumed the CEO role.

“WeWork is an amazing brand and if someone gives you a super brand to turn around, you’re going to have to say yes,” Mathrani told CNBC’s “Squawk Box.”

After the failed IPO, WeWork’s troubles continued. That November, Reuters reported the New York State Attorney General was investigating the company, including whether Neumann engaged in self-dealing to enrich himself.

That included reports that Neumann purchased the trademark for the word “We,” and planned to charge WeWork $6 million to transfer it. Self-dealing is when someone acts in their own best interest rather than their clients.

Bloomberg also reported that month that WeWork was facing scrutiny from the U.S. Securities and Exchange Commission over its disclosures to investors in the run-up to its failed IPO.

The failed IPO and onslaught of the pandemic led to several rounds of layoffs at the company in late 2019 and 2020. WeWork also suffered massive losses as Covid-19 shuttered office spaces worldwide.

Claure told “Squawk Box” that everybody has “an important role to play” and that Neumann deserves credit as the visionary who came up with the idea.

Neumann congratulated the new leadership team during an interview with the media Thursday morning at the outdoor beer garden at The Standard, an expensive hotel in New York City’s meatpacking district. He and co-founder Miguel McKelvey “couldn’t be happier” to celebrate the IPO, Neumann said.

“This has always been about the team and about what we did together, and we’re just so proud today and for this day,” he said.

» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC
» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic

Turn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.

The News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast

Connect with CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: https://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: https://cnb.cx/FollowCNBC
Follow CNBC News on Instagram: https://cnb.cx/InstagramCNBC




Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More