WeWork has ‘substantial doubt’ it can stay in business
WeWork said there’s “substantial doubt” about its ability to continue operating, citing sustained losses and canceled memberships to its office spaces.
The co-working company will focus over the next 12 months on reducing rental costs, negotiating more favorable leases, increasing revenue and raising capital, WeWork said in a statement late Tuesday.
WeWork’s office locations, which emptied out during the early months of the COVID-19 pandemic, were showing slow progress toward filling back up over the last year. But so far, the recovery appears to be unsustainable. WeWork said occupancy dropped in the second quarter compared with the previous quarter.
Many people of color found remote work lessens the racism they face on the job. Now they must decide: Is it worth trying to never return to the office again?
The company’s stock plummeted nearly 39% on Wednesday to an all-time low of less than 13 cents per share. It has plunged 99% since WeWork went public in October 2021, wiping out more than $11 billion in market value.
Its bonds are also at deeply distressed levels. The company’s 7.875% unsecured notes due in 2025 last changed hands for 34 cents on the dollar, according to data from Trace.
This week’s warning came months after WeWork struck a deal with some of its biggest creditors and SoftBank to cut its debt load by about $1.5 billion and extend other maturities.
The New York-based company also has been weathering a change in leadership. Sandeep Mathrani, who took over as chief executive in early 2020, left in May to become a partner at private equity firm Sycamore Partners. WeWork currently has an interim CEO.
Mathrani had taken over soon after co-founder and former CEO Adam Neumann was ousted for failing to take the once-highflying startup public in 2019. On Tuesday, WeWork said three of its independent board members are being replaced by four new board members.
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