2023-08-09 06:23:59
Orange alert for shared office giant WeWork. The company, which has been in great difficulty for years, warned, on Tuesday August 8, the American stock market policeman that he feared for his survival. “There is substantial doubt about the ability of the company to continue its activities”WeWork said in a filing with the SEC.
At issue, according to the company: financial losses, liquidity 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.
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 teleworking.
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Planned restructuring
The fate of New York-headquartered 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. It is considering restructuring, negotiating more favorable terms for leases, increasing the number of tenants and perhaps even issuing debt securities or selling assets. WeWork’s stock fell nearly 24% to 16 cents (about 14.50 euro cents) in electronic trading after the close of trading on Tuesday.
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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, renowned as a tech visionary.
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