WeWork files for long-awaited IPO

WeWork on Wednesday filed to raise $1 billion in an initial public offering, although the ultimate offering amount is expected to be at least three times larger.

My thought bubble: There is a ton of investor skepticism over WeWork's business model, with expectations that it could receive Tesla-like treatment from public shorts. That's one reason why the company plans to increase its cash cushion by securing a $6 billion credit facility in conjunction with the IPO.

• No exchange was listed, although the company's ticker symbol will be "WE."
• It also plans to have three classes of stock.

The financials: $904 million net loss on around $1.5 billion in revenue for the first half of 2019.

• Operating loss and revenue both doubled year-over-year.
• Net loss only climbed 25% year-over-year, related largely to $470 million of interest income (vs. a $46m charge in the first half of 2018). Not yet sure from where the $470 million is derived.
• There is zero mention of "community-adjusted EBITDA."
• Cash on hand was $2.47 billion.
• $4 billion revenue backlog through the end of Q2, up from $2.6 billion at the end of 2018. These relate to "non-cancelable contractual commitments."

The scale: WeWork reports 527,000 members, up from 268,000 at the end of June 2018 and 401,000 at the end of December 2018.

• 40% of its members are considered enterprise customers, thus helping fight a narrative about WeWork being reliant on tech startups.
• It has 528 locations in 111 cities in 29 countries.

Management: CEO Adam Neumann may be one of just three co-founders, but he controls the shares and the votes. He also didn't take a salary last year and agreed to lock up his shares for a year after the offering.

• Newmann also pledges (along with wife Rebekah) to donate at least $1 billion to charitable causes by the IPO's 10-year anniversary. If it doesn't happen, his voting rights get slashed.
• As a New York tech CEO emailed me after reading the S-1: "This is a one-man show and that’s the biggest unstated risk in the whole thing."

A risk: Neumann sat down with me at WeWork headquarters, one day before Uber's IPO, for an interview that Axios published here. That interview, plus a similar one with Business Insider, are listed as potential risk factors in the S-1.

• WeWork says it doesn't believe that its participation in those interviews represents a Securities Act violation, and would "vigorously" contest any such claims. But, were a court to disagree, WeWork "could be required to repurchase the shares sold to purchasers in this offering."

The backing: WeWork has raised over $8 billion in venture capital since its 2010 founding, including an infusion earlier this year from SoftBank at a $42 billion valuation.

• SoftBank is the company's largest outside shareholder, followed by Benchmark and J.P. Morgan.

The comp: IWG, the London-listed company that operates Regus co-working facilities, reported around $1.57 billion in first-half 2019 revenue.

• Plus it has profits.
• On the other hand, year-over-year revenue growth was only 13%.
• IWG's market cap is around $4.5 billion, with an enterprise value of $12 billion.

The bottom line: WeWork will be the most polarizing IPO of 2019, and that's saying something in a year that already saw Uber and Lyft.

Editor's note: This story has been updated with additional analysis from Dan's Pro Rata Newsletter.

Go deeper: WeWork discloses earnings, CEO discloses why it might go public