The giant of shared offices WeWork, in great difficulties for years, warned the police of the US stock market on Tuesday that it feared for its survival. “There is substantial doubt about the company’s ability to continue as a going concern,” WeWork said in a filing with the SEC. In question, according to the company: financial losses, liquidity needs and the fall in the number of tenants. It says it lost billions of dollars in the first six months of this year due to falling demand linked to poor economic conditions.
Once a startup star, WeWork raised billions of dollars from SoftBank Group. But the controversial management of its founder, Adam Neumann, worried investors, who ended up firing him in 2019. Then the pandemic emptied the offices, and the company fails to recover amid a demand for commercial premises that has fallen with the rise of the telecommuting.
Drop of almost 24% of Tuesday’s action
The fate of New York-based WeWork depends on “the successful execution of management’s plan to improve the company’s liquidity and profitability,” the company said in the SEC filing. You are considering restructuring, negotiating more favorable lease terms, increasing the number of tenants, and perhaps even issuing debt securities or selling assets. WeWork shares fell nearly 24% to 16 cents in electronic trading after the close of business on Tuesday.
WeWork board member David Tolley took over as the company’s interim chief executive in May, replacing Sandeep Mathrani, the real estate industry veteran who replaced Adam Neumann in 2020. The collapse of WeWork, which was valued at $47 billion, it had badly damaged the image of Japanese billionaire Masayoshi Son, CEO and founder of SoftBank Group, a renowned technology visionary.
Source: BFM TV
