WeWork's future: What to know after the company sounds the alarm on its ability to stay in business
WeWork said last week there was “substantial doubt” about its ability to stay in business, prompting speculation around the future of the troubled workspace-sharing company
NEW YORK — WeWork has sounded the alarm on its ability to stay in business, prompting speculation around the future of the troubled workspace-sharing company.
Last week, WeWork warned there was “substantial doubt” about the New York-based company's “ability to continue as a going concern” — which is accounting-speak for having the resources needed to operate and stay in business. WeWork pointed to increased member churn, financial losses and the company's need for cash, among other factors, over the next year.
On Friday, the company announced that it would be moving forward with a 1-for-40 reverse stock split in a bid to maintain its listing on the New York Stock Exchange.
The value of WeWork shares have plunged since the company went public in October 2021, after a spectacular collapse during its first attempt to do so two years earlier — which led to the ouster of its CEO and co-founder, Adam Neumann. WeWork was valued at $47 billion at one point, before investors started to drop off due to Neumann’s erratic behavior and exorbitant spending.
WeWork has made notable efforts to turn the company around since Neumann's departure, with executives pointing to improvements in annual revenue, significant cuts in operating costs and other growth opportunities as workplaces emerge from the COVID-19 pandemic. Still, experts say the risk of bankruptcy is on the table — bringing in questions around implications for the already-weakening world of office real estate.
Here's what you need to know.
WHAT IS WEWORK?
WeWork is a provider of coworking spaces. The
Read more on abcnews.go.com
