WeWork shares fell sharply on reports that the bankruptcy filing was imminent

A sign points to a WeWork location in Boston, Massachusetts on August 14, 2023. REUTERS/Brian Snyder Get license rights

Nov 1 (Reuters) – Shares of WeWork ( WE.N ) fell nearly 50% to record lows on Wednesday. The flexible workplace provider plans to file for bankruptcy early next week, according to media reports.

The New York-based company, which has been struggling with heavy debt and heavy losses for a few years now, was once privately valued at $47 billion and now has a market capitalization of just $121 million.

The bankruptcy filing could follow a series of setbacks for the SoftBank-backed company amid suspicions that its IPO plans in 2019 involved taking long-term leases and short-term rentals.

WeWork finally went public in 2021 at a much lower valuation than expected, a black mark for SoftBank, which has sunk billions into trying to shore up a startup that never turned a profit.

The Wall Street Journal first reported Tuesday that WeWork is considering filing for Chapter 11 in New Jersey.

The company has decided to suspend interest payments due Nov. 1 on senior notes due 2025, even though it has cash to make the payments, it said Tuesday. WeWork had warned of bankruptcy in August.

“Whether or not WeWork can reach a short-term accommodation with bondholders to avert a short-term bankruptcy, it may have many long-term office leases that may need to be renegotiated or written off,” said senior portfolio manager Jason Benowitz. At CI Roosevelt Private Wealth in New York.

“WeWork is a significant tenant in some key urban office markets and its failure or restructuring could further weigh on industry fundamentals.”

See also  Schools are closed due to flood risk on the Salinas River

The stock is trading at an all-time low of $1.18, after losing about 96% of its value this year.

Medha Singh reports in Bangalore; Editing by Shinjini Ganguly and Shaunak Dasgupta

Our Standards: Thomson Reuters Trust Principles.

Get license rightsOpens a new tab

Leave a Reply

Your email address will not be published. Required fields are marked *