Shares of WeWork, the once-prominent company in the shared office space industry, were halted for trading on Monday following reports that the company would file for bankruptcy protection. The company's stock has plummeted by nearly 99% this year. Last week, the stock declined by 66%, dropping from $2.52 to a low of 82 cents, after the Wall Street Journal reported that WeWork planned to file for Chapter 11 bankruptcy. Since its opening at $60 on January 3, the stock has decreased by 98.5%, reaching its highest point of $94.34 on February 2.
WeWork has not yet commented on these reports. Surprisingly, the company's shares reached an all-time high of $598.80 on October 22, 2021, just a day after going public.
WeWork was valued at $47 billion in January 2017 but has seen a significant decline since then. Its market cap is now estimated at $270 million as of August. The company has an estimated $10 billion in lease obligations due through the end of 2027 and has incurred losses of around $16 billion since its founding in 2010. WeWork operates 777 locations across 39 countries, with a total of 906,000 workstations and 653,000 physical memberships, generating an average of $502 per physical member.
The company's decline can be attributed to the negative impact of the pandemic, which led to empty offices in 2020. SoftBank, a Japanese conglomerate, provided $5 billion in new financing for WeWork in 2019 but reported a cumulative loss of $18.6 billion on its investment in the company. WeWork recently expressed doubts about its ability to remain in business, citing a slight decline in membership and increasing competition.