WeWork (WE), an office-sharing firm, is expected to file for bankruptcy as early as next week, according to reports from multiple outlets. The troubled firm was once considered to be extremely successful and was looked at as the future of the office. It has been facing lots of problems ever since the pandemic, when working from home became the norm and after its co-founder exited, followed by senior executives at a later date.
The impending bankruptcy filing in New Jersey was first reported by the Wall Street Journal and later by Reuters, which also reported the same news, according to information sources familiar with the matter who told the agencies. The reports also said that the filing could come as early as next week.
WeWork shares declined by more than 40 percent on Tuesday during after-hours trading. The company’s current market capitalization is about $121 million. It has been a rough year, as WeWork has lost about 96 percent of its value to date.
After the reports were released, a spokesperson for WeWork said, “We do not comment on speculation.”
New York-based WeWork first attempted to go public in 2019. However, it was abandoned due to concerns about several debts as well as losses. There was also public scrutiny on Adam Neumann, who was the chief executive. He stepped down from the post, and the company announced that it had scrapped its plan to list on the stock exchange a week later.
Problems at WeWork were compounded after the onset of the pandemic. As remote work gained traction, WeWork came under further scrutiny as tenants wanted release from the leases they had signed earlier.
In 2021, WeWork was listed on the New York Stock Exchange at a valuation that was much lower than its initial one in 2019, which was reportedly close to $47 billion. Japanese investor SoftBank has been its main investor and reportedly put in billions of dollars, although WeWork continued to lose money. The venture capital-backed office-sharing firm that was once said to be very successful has now seen a huge reversal as it may file for Chapter 11 bankruptcy in the near future.
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