WeWork’s share price neared zero on Wednesday after the company warned it could file for bankruptcy, a stunning turnaround for a company once privately valued at $47 billion, Reuters and News.ro reported.
The SoftBank-backed company has been reeling after plans to go public in 2019 fell through as investors reacted to its heavy losses, corporate governance flaws and the management style of its then-CEO Adam Neumann, who was also the company’s founder.
WeWork’s woes have not abated since then.
In 2021, the company managed to go public at a much lower valuation, but never turned a profit.
Its main backer, the Japanese conglomerate SoftBank, provided tens of billions of dollars to support the startup, but the company continued to lose money.
“WeWork has been perhaps the most hyped startup in recent years,” said Steve Clayton, director of equities at Hargreaves Lansdown.
WeWork’s spectacular collapse is reflected in its share price
Since the company’s October 2021 IPO, WeWork shares have lost nearly all of their value and were trading at 13 cents a share on Wednesday, for a total market capitalization of about $260 million.
Many executives have left, including CEO Sandeep Matrani in May and three board members this week.
The search for a new CEO is underway, WeWork said Tuesday.
The company’s business model involves long-term lease and short-term lease of space. The company has expanded rapidly over the years, but the global coronavirus pandemic has made shared office space less attractive.
Source: Hot News
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