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WeWork Is Finally Going Public Through A SPAC Merger

WeWork Is Finally Going Public Through A SPAC Merger

Plus, GlaxoSmithKline and Vir Biotechnology applied for emergency use authorization for their COVID antibody drug with the FDA, Chinese EV-maker Nio shut down production due to the global semiconductor shortage, and the shipping vessel blocking the Suez Canal is expected to be stuck until Wednesday.

Stocks were higher at the open on Friday with the Dow added 61 points, or nearly 0.2%. The S&P 500 also gained around 0.2%, while the Nasdaq rose 0.1%.

WeWork is finally going public nearly 2 years after its original high-profile failed listing. This time around, rather than a traditional IPO, WeWork has agreed to to merge with blank-check SPAC BowX Acquisition Corp. The deal values WeWork at $9 billion inducing debt, and the company will raise $1.3 billion through the deal. Two years ago, SoftBank-backed WeWork was valued at as much as $47 billion, but its plans for an IPO imploded in 2019 on concerns about the company’s business model and the management style of then CEO and co-founder Adam Neumann. Last year, the COVID pandemic took a further toll on WeWork’s business as its shared offices became less appealing amid the public health crisis. Coming to the market with a SPAC “is really as good as it can get for WeWork, to kind of keep this aspirational life to become a large publicly traded company down the road,” said Josef Schuster, founder and CEO of IPOX Schuster, adding that the negative press surrounding its previous attempt would have made it “really difficult to raise billions of dollars in the public market, just as a straight and traditional IPO.” 

Speaking of IPOs, two retail brokerages are looking at giving their customers access to initial public offerings and the opportunity to buy shares at the same time as professional asset managers. Online lender SoFi said that it would give clients with more than $3,000 in their accounts the ability to invest in IPOs, and Robinhood also said that it is building technology that would let its users do the same. “Fintech largely has a populist, disruptive mission and so this is right in their DNA,” said Bloomberg Intelligence analyst Eric Balchunas. “As opposed to letting ‘the man’ run it, they want to reward their customers and the little guy.”

GlaxoSmithKline and Vir Biotechnology applied for emergency use authorization from the FDA for their monoclonal COVID antibody drug. The FDA submission is based on an interim analysis of a phase three trial that evaluated the drug for the early treatment of the coronavirus in those at high-risk of hospitalization ages 12 and older. The drug was found to reduce hospitalizations or death from COVID by 85% compared with placebo. “As a result, the Independent Data Monitoring Committee recommended that the trial be stopped for enrollment due to evidence of profound efficacy,” the companies said in a statement.

Chinese EV start-up Nio became the latest auto maker to suspend production amid the global semiconductor shortage. The five-day shutdown will begin on March 29 and is expected to reduce Nio’s first-quarter deliveries by at least 500 vehicles. Even with the reduction, Nio is still on track to deliver more vehicles to start 2021 than rivals Xpeng and Li Auto. “The overall supply constraint of semiconductors has impacted the company’s production volume in March,” Nio said. “The company expects to deliver approximately 19,500 vehicles in the first quarter, adjusted from previously released outlook of 20,000 to 20,500 vehicles.”

And the still-stranded mega-container ship blocking the Suez Canal is now holding up an estimated $400 million an hour in trade. That’s according to Lloyd’s List, which values the canal’s westbound traffic at roughly $5.1 billion a day, and eastbound traffic at around $4.5 billion a day. “Every day that the vessel remains wedged across the canal adds delays to normal cargo flows,” said Jon Gold, vice president of supply chain and customs policy for the National Retail Federation. “Many companies continue to struggle with supply chain congestion and delays stemming from the pandemic. There is no doubt the delays will ripple through the supply chain and cause additional challenges.” Dislodging the container vessel, the Ever Given, is now expected to take until at least Wednesday.

Stocks We’re Watching

Houston Wire & Cable (NASDAQ: HWCC): Houston Wire & Cable shares gained nearly 50% yesterday after the company announced it will be acquire by Omni Cable, LLC for $5.30 per share in an all-cash transaction valued at $91 million. “HWCC, Vertex and OmniCable are highly respected suppliers in their respective markets serving electrical and industrial distributors throughout the U.S. and Canada. This merger creates an outstanding combination of leading businesses that will be well positioned to provide increased value and customer service to its redistributor partners,” said Houston Wire & Cable President and CEO James L. Pokluda III in a statement

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