November 1st 2023.
WeWork is preparing to file for bankruptcy as soon as next week, according to a source knowledgeable about the situation. The news sent shockwaves through the market, with the company's shares falling 32% in after-hours trading. This marks an incredible 96% decline since the beginning of the year.
The Wall Street Journal reported that WeWork is considering filing a Chapter 11 petition in New Jersey. The company did not comment on the situation. Earlier in the day, they had entered into an agreement with creditors to temporarily postpone payments for some of its debt.
WeWork's financials do not bode well. As of June, they had a net long-term debt of $2.9 billion and long-term leases amounting to more than $13 billion. Furthermore, rising borrowing costs have been hurting the commercial real estate sector.
The company's filing for bankruptcy marks a tragic turn of events, only a year after they were valued at $47 billion by SoftBank. WeWork's plans to go public in 2019 failed due to investors' doubts about their business model and deep losses. The fallout was severe, leading to the company's current situation.
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