{"id":10445,"date":"2023-08-09T11:45:42","date_gmt":"2023-08-09T11:45:42","guid":{"rendered":"https:\/\/isafespend.com\/investing\/wework-shares-sink-after-warning-of-bankruptcy-risk\/"},"modified":"2023-08-09T11:45:43","modified_gmt":"2023-08-09T11:45:43","slug":"wework-shares-sink-after-warning-of-bankruptcy-risk","status":"publish","type":"post","link":"https:\/\/isafespend.com\/?p=10445","title":{"rendered":"WeWork shares sink after warning of bankruptcy risk"},"content":{"rendered":"
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\u00a9 Reuters. The WeWork logo is displayed on a screen during the company’s IPO on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 21, 2021. REUTERS\/Brendan McDermid\/File photo<\/span>
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(Reuters) -WeWork on Tuesday warned of a possible bankruptcy after reporting yet another quarterly loss, in a stunning reversal of fortune for the shared workspace provider that was valued at $47 billion in 2019.<\/p>\n

The SoftBank-backed firm is worth just $446.8 million as of last closing share price. The stock plunged 16.5% to 20 cents before the bell on Wednesday after it said three board members would step down.<\/p>\n

WeWork has been struggling to turn a quarterly profit as hybrid work culture and job cuts in the tech sector have hampered demand for its workspaces.<\/p>\n

The departure of its CEO and CFO earlier this year has also complicated its turnaround efforts. The company said on Tuesday that the search for a new CEO is on.<\/p>\n

WeWork said it may need to consider strategic options, including raising more money or obtaining relief under the U.S. Bankruptcy Code.<\/p>\n

The company has been in a turmoil ever since it filed its IPO paperwork in 2019 as investors pointed out governance issues involving its then founder-CEO Adam Neumann.<\/p>\n

They also raised concerns about burgeoning losses and questioned its business model that involved taking long-term leases and renting out spaces for a short term.<\/p>\n

As a result, its valuation fell to as low as $10 billion in the back half of 2019 from $47 billion and it withdrew the IPO plans after ousting Neumann.<\/p>\n

WeWork eventually went public in 2021 through a SPAC (special purpose acquisition company) merger amid persistent doubts over its business model.<\/p>\n

As results suffered, WeWork reached a deal in March to cut debt by about $1.5 billion and extend the date of some maturities in a bid to preserve cash.<\/p>\n

It shuttered offices and laid off workers, helping the company report a smaller net loss of $349 million in the second quarter compared to $577 million a year ago.<\/p>\n

WeWork burnt $646 million in cash in the first six months of 2023 and as of June end is left with $205 million in hand.<\/p>\n

The company said it was planning to shore up liquidity by reducing rent and tenancy costs, controlling expenses and reducing member churn.<\/p>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

\u00a9 Reuters. The WeWork logo is displayed on a screen during the company’s IPO on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 21, 2021. REUTERS\/Brendan McDermid\/File photo (Reuters) -WeWork on Tuesday warned of a possible bankruptcy after reporting yet another quarterly loss, in a stunning reversal of<\/p>\n","protected":false},"author":1,"featured_media":10446,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49],"tags":[32],"class_list":{"0":"post-10445","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-investing","8":"tag-featured"},"yoast_head":"\nWeWork shares sink after warning of bankruptcy risk | iSafeSpend<\/title>\n<meta name=\"description\" content=\"\u00a9 Reuters. 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