What is the most money that wework could raise

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Reference no: EM133325619

Case: After cancelling the IPO, WeWork talked to a multiple SPACs proposing a de-SPAC merger valuing WeWork at around $10 billion. One of the SPACs-BowX Acquisition Corp.-had the following structure at its IPO:

• Units issued: 10 million

• Unit offer price: $10

• Units include

1 share of stock redeemable for $10 by shareholder at de-SPAC merger
½ 5-year warrant, $11.50 strike price, redeemable by SPAC for $18.50
• Underwriter discount: 5.5%

• Founding sponsor promote: 20% of total shares for $25,000

• Founder warrants:

$1.50 price per warrant
5-year expiration, $11.50 strike price

Question [A] Hundreds of SPACs have had IPOs in the last 2 years, compared to very few in past years.

Question 1] Explain what you believe is the main benefit to the BowX SPAC founders/sponsors?

Question 2] Explain what you believe is the main benefit to BowX SPAC investors investing in SPAC units at the IPO?

Question [B] What is the most money that WeWork could raise in a merger with BowX without a PIPE investment?

Question [C] Explain what you believe to be the most significant benefit of WeWork choosing to have a SPAC merger relative to a traditional PO.

Reference no: EM133325619

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