Once worth $47 billion, WeWork shares near zero after bankruptcy warning

economictimes.indiatimes.com:

WeWork shares approached zero on Wednesday after the one-time startup darling warned it could go bankrupt in a stunning reversal of fortune for a company that was once privately valued at $47 billion. The SoftBank-backed company has been in turmoil ever since its plans to go public in 2019 imploded after investors recoiled at its hefty losses, corporate governance lapses and the management style of then founder-CEO Adam Neumann. WeWork's woes did not abate in subsequent years.

It finally managed to go public in 2021 at a much-reduced valuation, but it has never turned a profit. Its major backer, Japanese conglomerate SoftBank, sunk tens of billions to prop up the startup, but the company has continued to lose money. «WeWork was perhaps the most overhyped startup of recent years,» said Steve Clayton, head of equity funds at Hargreaves Lansdown.

Shares of the company closed 38.5% lower at 12 cents on Wednesday. Since its debut through a blank-check merger in October 2021, WeWork's shares have lost nearly all of their value, and were trading on Wednesday at 13 cents for a valuation of roughly $260 million. Numerous executives have departed, including CEO Sandeep Mathrani in May and three board members this week.

The search for a new CEO is on, WeWork said on Tuesday. The company's business model involves taking long-term leases and renting out spaces for a short term. It expanded rapidly over the years, but the global coronavirus pandemic made shared office space less appealing.