WeWork shares sink after warning of bankruptcy risk
Thursday, 10 August 2023
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, reports Reuters.
The SoftBank-backed firm is worth just $446.8 million as of last closing share price. The stock plunged 16.5 per cent to 20 cents before the bell on Wednesday after it said three board members would step down.
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.
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.
WeWork said it may need to consider strategic options, including raising more money or obtaining relief under the US Bankruptcy Code.
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.