WeWork is reportedly close to bankruptcy shares are plummeting –

WeWork is reportedly close to bankruptcy, shares are plummeting – TechCrunch

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According to sources cited by the Wall Street Journal, WeWork is close to filing for Chapter 11 bankruptcy in New Jersey.

If WeWork does indeed file, it should come as no surprise to close supporters of the flexible workspace provider. WeWork warned in August in its second-quarter results that “there is significant doubt about the Company’s ability to continue as a going concern.”

The company has faced a number of challenges for years as demand for its co-working spaces has steadily declined over time. These issues intensified during the COVID pandemic as companies abandoned office space and employees began working remotely. Even though some companies have returned to offices, appetite for WeWork space is not as strong as it was in pre-pandemic days.

Earlier this month, WeWork missed interest payments to its bondholders and was given 30 days to make those payments, according to a securities filing. On Oct. 30, WeWork said it had begun discussions with “certain stakeholders in its capital structure,” such as SoftBank and Goldman Sachs, about improving its balance sheet while it takes steps “to rationalize its real estate footprint.”

In August, the 13-year-old company reported a second-quarter net loss of $397 million on revenue of $877 million. While revenue rose 4% year-over-year, WeWork interim CEO David Tolley noted in a statement at the time: “The oversupply of commercial real estate, increasing competition in flexible space and macroeconomic volatility resulted in higher member churn and weaker membership Demand than we expected, leading to a slight decline in membership numbers.”

The company’s shares fell over 47% in after-hours trading today, trading at just $1.21 and hitting a new 52-week low. This gave the company a market cap of just $121 million, a stark contrast to the $47 billion valuation it achieved after raising $1 billion in its Series H round led by SoftBank in January 2019. dollars raised.