The shared office giant WeWork, in great difficulty for years, warned the American stock market policeman on Tuesday August 8 that it feared for its survival. “There is substantial doubt about the Company’s ability to continue as a going concern,” WeWork said in an SEC filing.
At issue, according to the company, are financial losses, cash flow needs and the decline 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. WeWork’s stock fell nearly 24% to 16 cents in electronic trading after the close of trading on Tuesday.
The fate of New York-headquartered WeWork hinges on “the successful execution of management’s plan to improve the company’s liquidity and profitability,” the company said in the SEC filing. . It is considering restructuring, negotiating more favorable terms for leases, increasing the number of tenants and perhaps even issuing debt securities or selling assets.
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 ousting him in 2019. Then the pandemic emptied the offices, and the company is unable to recover amid demand for business premises has fallen with the rise of telework.
WeWork board member David Tolley took over as interim CEO of the company in May, replacing Sandeep Mathrani, the real estate industry veteran who took over from Adam Neumann in 2020. The Collapse of WeWork, which was valued at $47 billion, had seriously tarnished the image of Japanese billionaire Masayoshi Son, the CEO and founder of SoftBank Group, a renowned tech visionary.
