- WeWork shares plunged to their lowest level on record following reports that the flexible office space provider may declare bankruptcy.
- The company missed debt payment last month and was granted an extension from its creditors.
- WeWork was once valued at $47 billion, it now has a market capitalization of ;approximately $60 million.
WeWork (WE) shares lost about half their value during intraday trading on Wednesday following reports that the flexible office space provider could file for bankruptcy as soon as next week.
WeWork withheld interest payments to its bondholders on October 2 and had a 30-day grace period to repay the debt. Yesterday, the company said in a securities filing that certain noteholders had agreed to “refrain from exercising their rights and remedies” for an additional seven days.
As of June, the company had $2.9 billion in long-term debt and more than $13 billion in long-term leases. It has more than 700 sites in 39 countries.
News of the potential bankruptcy came just two weeks after WeWork named interim CEO David Tolley, former CFO of Intelsat and OneWeb, as its new CEO. At the time, the company noted that Tolley “brings more than 25 years of experience creating and executing strategies and operational improvements that drive value, cash flow and revenue. He added that he would “continue to lead WeWork’s ongoing transformation efforts.”
WeWork, founded by entrepreneurs Adam Neumann and Rebekah Keith, and Miguel McKelvey in 2010, was once hailed as a shining example of the new economy. At one point it was valued at $47 billion. However, controversies over its business model and questions about Neumann's leadership led the company to cancel an initial public offering (IPO) planned for 2019 and led to Neumann's resignation as CEO. It finally went public in 2021, with Japanese company SoftBank as a major investor. Today, its market capitalization is around $60 million.
WeWork shares fell to a historic low on Wednesday.
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