WeWork plans to file for bankruptcy as early as next week: Source
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WeWork raised “substantial doubt” about its ability to continue operations in August.
PHOTO: REUTERS
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NEW YORK – Flexible workspace provider WeWork plans to file for bankruptcy as early as next week, a source familiar with the matter said on Tuesday, in a stunning reversal of fortune for a company that was once privately valued at U$47 billion (S$64.4 billion).
Shares of the company fell 30 per cent in extended trading after The Wall Street Journal first reported the news.
They have fallen roughly 96 per cent in 2023.
New York-based WeWork is considering filing a Chapter 11 petition in New Jersey, the Journal reported, citing people familiar with the matter.
WeWork did not immediately respond to a Reuters request for comment.
Earlier on Tuesday, the debt-laden company decided to withhold interest payment of about US$6.4 million.
The company has been in turmoil since its plans to go public in 2019 imploded following investor scepticism over its business model of taking long-term leases and renting the spaces for the short term, and on worries over its hefty losses.
WeWork’s woes did not abate in subsequent years.
It finally managed to go public in 2021 at a much-reduced valuation.
Its major backer, Japanese conglomerate SoftBank, sank tens of billions to prop up the start-up, but the company has continued to lose money.
WeWork raised “substantial doubt” about its ability to continue operations in August, with numerous top executives, including chief executive Sandeep Mathrani, departing in 2023.
Co-founded by Mr Adam Neumann, WeWork began operations in 2010 in New York, catering mainly to freelancers, start-ups and small businesses, but grew rapidly to include larger clients. REUTERS
