Reports suggest that We Work is considering filing for bankruptcy, with this action possibly taking place as early as next week, according to US media.
The troubled office-sharing company recently informed US financial regulators that it had reached an agreement with its creditors to temporarily delay some debt payments.
We Work, which was once privately valued at $47 billion, has witnessed a staggering 98% decline in its stock market value over the past year. The Wall Street Journal was the first to report that We Work is contemplating bankruptcy proceedings in New Jersey, and Reuters also confirmed this information through a reliable source.
In response to these reports, a WeWork spokesperson stated, “We do not comment on speculation.” Following these developments, WeWork’s shares experienced a sharp drop of over 40% in after-hours trading in New York on Tuesday.
This New York-based company has been grappling with challenges ever since its failed attempt to go public in 2019 due to concerns regarding its debt, financial losses, and management issues.
A week before the official cancellation of its share sale, the company’s founder, Adam Neumann, stepped down from his position as chief executive, citing the scrutiny of his leadership as a significant distraction.
WeWork also faced substantial setbacks during the COVID-19 pandemic, as social distancing measures forced people to work from home. It wasn’t until 2021 that WeWork managed to list on the New York Stock Exchange, albeit at a significantly lower valuation.
Japanese conglomerate SoftBank had injected substantial capital into WeWork, despite its continuous financial losses. In August, WeWork expressed “substantial doubt” about its ability to sustain its operations, citing challenges stemming from reduced demand and a challenging operating environment.
The company has also experienced a significant exodus of top executives in the current year, including CEO and Chairman Sandeep Mathrani. As of the end of June, WeWork boasted 777 locations across 39 countries worldwide.
Last Updated: 01 November 2023