Commercial real-estate startup WeWork is reportedly considering filing for bankruptcy, marking another troubling development in the company's tumultuous journey since its stock-market debut earlier this year. According to reports from The Wall Street Journal and Reuters, WeWork may file for chapter 11 as early as next week. However, the company has not confirmed or commented on these reports.
News of the potential bankruptcy sent WeWork's shares plummeting by 38% in premarket trading, with the stock projected to open at just over $1.40. This sharp decline follows a series of setbacks for the company, including its failed attempt to go public in 2019 and the subsequent departure of founder Adam Neumann.
WeWork, which reached a valuation of $47 billion in 2019 after securing a $5 billion investment from SoftBank, finally went public in March 2021 through a merger with BowX, a special purpose acquisition company. However, the company has struggled to regain stability, facing mounting debts and significant losses.
In August, WeWork raised concerns about its future, stating that it would need additional capital to survive the next year. The company recently announced its intention to withhold interest payments on approximately $6.4 million of debt in an effort to bolster its balance sheet.
Since its stock-market debut, WeWork shares have plummeted by over 99%, erasing the company's market capitalization from $47 billion to just $140 million. If the reports of bankruptcy filing are accurate, this loss could potentially worsen.
Overall, WeWork's potential bankruptcy filing is the latest blow in a series of challenges for the commercial real-estate startup. The company's stock-market debut earlier this year failed to revive its fortunes, and it has since struggled to address its financial difficulties. The future remains uncertain for WeWork as it faces the possibility of bankruptcy.