May 3, 2019

Why Lyft and WeWork filed for IPOs last year

Illustration: Sarah Grillo/Axios

Earlier this week we marveled at how news of WeWork's confidential IPO filing hadn't leaked, despite having submitted it last December. We also should have noted the import of that particular month, since it was the last opportunity for WeWork to be considered an "emerging growth company."

The bottom line: Companies with less than $1.07 billion in revenue for their most recently-completed calendar year qualify for certain benefits that make the IPO process easier.

WeWork, which generated over $1.07 billion in full-year 2018 revenue, isn't alone. Lyft filed confidentially for its IPO last December while it also remained under the EGC revenue threshold. For both, benefits included:

  • Submitting only two years of audited financials, instead of three.
  • Providing less detailed executive compensation data.
  • Able to "test the waters" with prospective investors prior to publicly filing an IPO registration statement, although the SEC recently voted to extend this benefit to all companies.

Yes, but: Most tech companies going public these days qualify as EGCs anyways—94% of U.S. listings in the first nine months of 2018, per EY—so this dilemma only affects a small number of large, well-known issuers.

Go deeper

Inside hackers' pivot to medical espionage

Illustration: Aïda Amer/Axios

A wave of cyber-spying around COVID-19 medical research is once more demonstrating the perils of treating cybersecurity as a separate, walled-off realm.

Driving the news: U.S. officials recently announced an uptick in Chinese-government affiliated hackers targeting medical research and other facilities in the United States for data on a potential COVID-19 cure or effective treatments to combat the virus. Additionally, “more than a dozen countries have redeployed military and intelligence hackers to glean whatever they can about other nations’ virus responses,” reports the New York Times.

The downsides of remote work

Data: Reproduced from Prudential/Morning Consult "Pulse of the American Worker Survey"; Chart: Axios Visuals

The coronavirus pandemic has forced a large-scale experiment in working from home. It has gone well enough that many companies are expanding their remote work expectations for the foreseeable future, and remote employees want to continue to work that way.

Yes, but: The downsides of remote work — less casual interaction with colleagues, an over-reliance on Zoom, lack of in-person collaboration and longer hours — could over time diminish the short-term gains.

Hong Kong's economic future hangs in the balance

Illustration: Sarah Grillo/Axios

As Beijing forces a sweeping national security law on Hong Kong, the once semi-autonomous city's status as one of Asia's largest financial hubs is at risk.

Why it matters: Political freedoms and strong rule of law helped make Hong Kong a thriving center for international banking and finance. But China's leaders may be betting that top firms in Hong Kong will trade some political freedoms for the economic prosperity Beijing can offer.