We work
The company’s shares, which raised “significant doubts” about its future in August, have fallen 98% this year
Shares of WeWork were suspended on Monday as Wall Street prepared for the shared office space provider to file for bankruptcy.
Trading in the troubled company’s shares was halted before the opening bell on the New York Stock Exchange after reports that the company was preparing to file for Chapter 11 protection.
By late morning in New York, as trading in other U.S.-listed stocks was already in full swing, WeWork had not yet released a statement.
The troubled company, once valued at $47 billion on the private market, has seen its share price fall 98% this year, leaving the company’s capitalization now below $50 million. In August, the company expressed “significant doubt” about its ability to continue as a going concern as it struggled with $2.9 billion in net long-term debt and more than $13 billion in long-term leases.
WeWork said last week that it was not commenting on speculation after The Wall Street Journal reported that it planned to file for bankruptcy protection, and did not immediately respond to a request for comment on Monday’s trading suspension.
WeWork has has never fully recovered from the downfall of its founder, Adam Neumann, who left the company in September 2019 amid efforts to go public and the remote work revolution sparked by the coronavirus pandemic.
Adam Neumann in 2017. Photo: Eduardo Muñoz/Portal
The company’s attempt to list on the New York Stock Exchange as We Company in 2019 involved filing a revealing prospectus with the Securities and Exchange Commission that raised questions about the company’s long-term viability, viability and governance. The company would not go public until 2021. Neumann received a payout package of $445 million upon his exit.
Founded in 2010, the company is engaged in the long-term leasing of office buildings and the sale of short-term memberships to offices geared towards co-working. The company was once valued at $47 billion with $12.8 billion in investment, mostly from Japanese multinational SoftBank. However, following the release of the S-1 prospectus, analysts valued the company at $10 billion.
WeWork closed dozens of its co-working spaces in response to pandemic lockdowns as remote work dominated co-working.
However, its commercial real estate portfolio is still huge, comprising around 777 locations in 39 countries as of June. According to the company, it housed 906,000 desks. (Guardian US rents space from WeWork.)
WeWork rushed to adapt to a post-Covid world, trying to position itself as a specialized flexible office space provider as companies and their employees weighed how and where they should work. However, the company remained deep in the red, losing $696 million in the first half of this year.
Neumann, 44, has already founded a new company. Flow, which raised $350 million last year from Silicon Valley venture capital firm Andreessen Horowitz, focuses on residential real estate.
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