WeWork Lost $219,000 Per New Member It Added in 2018

When WeWork filed its S-1 prospectus in August 2019, analysts found a number buried in the document that reframed everything: in 2018, the company had added roughly 8,700 net new members while spending $1.9 billion more than it earned, implying a member acquisition cost of approximately $219,000. WeWork charged those members an average of around $6,000 a year. The math did not close.

SoftBank had led funding rounds that pushed WeWork's valuation to $47 billion by early 2019, making it the most valuable startup in the United States. The S-1 document, intended to prepare the company for a public offering, instead became the document that killed it. Investors who read it closely found that WeWork was classifying conventional costs as investments, reporting a non-standard metric called "community-adjusted EBITDA" that stripped out most of its largest expense categories, and had extended substantial loans to its own CEO, Adam Neumann, who had also sold $700 million of his shares back to the company before the IPO.

Neumann resigned in September 2019. The IPO was withdrawn. SoftBank, which had been the company's largest backer, ended up taking a controlling stake in a rescue deal that valued WeWork at $8 billion — an $39 billion write-down from the peak. WeWork went public via SPAC in 2021 at a valuation of about $9 billion, struggled with post-pandemic office demand, and filed for Chapter 11 bankruptcy in November 2023.