The incredible implosion of WeWork is only something that happens at the latter end of a cycle.
We learned yesterday that the shared workspace company would cut 30% of its workforce or about 4,000 jobs.
The company has effectively run out of cash, as it never told investors in the S1 filing, that if it didn't IPO, it would go bankrupt.
SoftBank has thrown financial lifelines to WeWork, but nothing is guaranteed.
The collapse of WeWork and its attempt to IPO last month has been an opportune moment for the Chinese equivalent, Ucommune, to start the IPO process.
Sources told Reuters on Friday that China's biggest shared workspace company is about to file a confidential prospectus with the US Securities and Exchange Commission (SEC) for a US IPO launch.
This is huge news since the market was expecting WeWork to IPO in September.
The source said the Beijing-based company had a valuation of $2.6 billion in 2018 and has appointed Bank of America, Citigroup, and Credit Suisse to work on the deal.
While market conditions certainly don't support any further IPOs for this year, something that we highlighted in a note earlier this month. The sources said Ucommune is waiting on feedback from large investors to see if the time is right to list shares in the US -- something that might infuriate the White House.
We recently reported that Nasdaq is cracking down on small capitalized companies from China looking to IPO, those with a $100 to $200 million cap -- so with Ucommune allegedly worth several billion dollars, it might escape the crackdown.
The source said a "deal" could be completed before the end of the year. The vagueness of what a "deal" actually means, leaves us with many questions.
Ucommune has 200 shared workspaces in 37 countries, including locations in New York, Los Angeles, Hong Kong, Beijing, and Shanghai. The company said on its website that more than 350 sites could be opened in the next several years.
As WeWork dies, the Chinese version of it thrives, now expecting to file for a US IPO by year-end.