WeWork stock tanks 50% after bankruptcy report

livemint.com:

WeWork can reach a short-term accommodation with bondholders to stave off a near-term bankruptcy, it likely holds many long-term office leases that will need to be restructured or written off," Jason Benowitz, senior portfolio manager at CI Roosevelt Private Wealth in New York told news agency Reuters. "WeWork remains a significant tenant in some major urban office markets and its failure or restructuring may further weigh on industry fundamentals," Jason added.

WeWork's looming bankruptcy declaration comes in the wake of a sequence of challenges faced by the company. In 2019, the company's plans to launch an initial public offering (IPO) didn't go well due to doubts among investors about WeWork's business model which involved securing extended leases and subletting on a short-term basis.

SoftBank infused billions of dollars in the startup to make it work and WeWork finally went public in 2021 at a much reduced valuation. The company which once boasted of a valuation of a staggering $47 billion is now reduced to just $121 million in market capitalization.

Earlier, WeWork sounded the bankruptcy alarm in August this year when the stock of the company crashed 38% to near zero levels. The company witnessed multiple top-level exits including CEO Sandeep Mathrani and 3 other board members during the tough phase.

“Fewer and fewer companies from mature large-cap businesses to startups are willing to enter into long-term leases for geographically fixed spaces," interim CEO David Tolley told Reuters. "Exciting news! Mint is now on WhatsApp Channels