WeWork unveils one-for-40 reverse stock split, sending shares lower

investing.com:

Investing.com — WeWork (NYSE:WE) shares shed over a fifth of their value in early U.S. trading on Friday after the flexible workplace group announced that it would conduct a one-for-40 reverse stock split.

The move, which will see the company exchange 40 of its existing shares for a single new one, aims to bring its price per share back up above $1. This would put it back into compliance with listing requirements on the New York Stock Exchange. In April, WeWork received a non-compliance notice from the NYSE because its average stock price was below the $1 mark over 30 straight trading days.

The reverse stock split, which WeWork said is not expected to impact its current or future operations, will come into effect after markets close on September 1.

Since their debut via a blank-check merger in October 2021, WeWork's share price has become almost worthless. The firm, once given a valuation of $47 billion by Japan's SoftBank (TYO:9984), now has a market capitalization of approximately $336 million.

Once a darling of the tech industry, WeWork's fortunes turned after a 2019 initial public offering was scuppered amid investor worries over its path to profitability and the actions of former Chief Executive Adam Neumann.

Last week, WeWork warned that there is now «substantial» doubt around its ability to continue as a going concern. It added that its management team must raise additional funds in order to keep the business afloat and secure liquidity over the next twelve months.

Interim Chief Executive Officer David Tolley, who took over from ex-boss Sandeep Mathrani in May, noted that there has been a «steep decline» in memberships due in part to excess commercial real estate supply and broader economic volatility.

The company