Sources say WeWork could file for bankruptcy protection in New Jersey as soon as next week
Recent reports suggest that the co-working behemoth, WeWork, might imminently file for bankruptcy, with the possible location for this bankruptcy protection being in New Jersey, USA.
In August, when unveiling its Q2 financials for fiscal year 2023, WeWork acknowledged an amelioration in its losses. Nevertheless, the firm’s cumulative deficit had burgeoned to approximately $15 billion. The report even alluded to the company’s viability being contingent upon bolstering its liquidity and profitability within the ensuing 12 months.
Since its initial public offering in 2021, WeWork’s stock has plummeted by a staggering 99%. The severity of this decline was further underscored in April when the New York Stock Exchange issued a delisting warning, consequent to WeWork’s shares languishing below $1 for 30 consecutive trading days, underscoring the market’s profound skepticism regarding its prospects.
Founded jointly by Adam Neumann and Miguel McKelvey in 2010, WeWork thrived by meticulously selecting, refurbishing, and repurposing office buildings, thereby attracting an array of startups and established corporations alike. The market once held an optimistic view of its trajectory. Its footprint expanded to nearly 800 co-working spaces across 39 global locations, including a notable presence in Taipei’s Xinyi District, Taiwan. The pinnacle of its early success was perhaps best exemplified when Softbank acquired a majority stake in 2019 for a colossal $16 billion, further catalyzing WeWork’s ascendant phase.
However, after its initial unsuccessful bid to go public, WeWork’s fortunes seemed inexorably altered. Despite its 2021 merger with BowX Acquisition Corp via a SPAC route, the company’s trajectory failed to exhibit any positive inflection. The pervasive uncertainty of the pandemic era nudged numerous firms towards remote working, inducing a recalibration in office leasing investments and amplifying WeWork’s challenges. Even as more enterprises beckon their employees back to the office, the tangible benefits to WeWork’s operational growth appear elusive.