Breaking news has just hit Wall Street with the force of a runaway wrecking ball: WeWork, the one-time darling of the shared office space sector, is staring down the barrel of bankruptcy, sending shock waves through the markets as trading grinds to a shocking halt.
In what could be the final chapter of a rags-to-riches-to-rags story, WeWork’s shares have been frozen in their tracks as the bell tolls for what could be the company’s last stand.
With its stock value down by a jaw-dropping 98% this year alone, the whispers of Chapter 11 are growing into a roar that can’t be ignored.
As the clock ticked down to the start of trading on Monday, the New York Stock Exchange threw the emergency brake on WeWork’s shares, following a frenzy of reports predicting the company’s imminent plea for bankruptcy protection.
The silence from WeWork’s camp is deafening – as mid-morning ticked by, not a peep has been heard from the once $47 billion behemoth, leaving investors and Wall Street’s finest on tenterhooks.
Let’s rewind the tape to August, when WeWork sounded the alarms, admitting to the world that there was a “substantial doubt” clouding its future.
With a mountain of $2.9 billion in net long-term debt and staggering lease commitments topping $13 billion, the company’s once-bright star seems to have been snuffed out.
WeWork’s drama started with the stunning ouster of its founder, Adam Neumann, in 2019, amid a botched attempt to hit the stock market jackpot.
The tale took another twist with the remote work revolution, sparked by the global pandemic, which saw WeWork scrambling to shut down co-working spaces as the world zipped up business bags and set up home offices.
Even as WeWork tried to reinvent itself in the ghostly post-Covid world, rebranding as the go-to for flexible office space, the red ink kept flowing, drowning the company in a $696 million loss in the first half of this year.
Yet, as WeWork teeters on the precipice of potential collapse, Neumann has already sailed into his next venture, a residential real estate gambit called Flow, with a cool $350 million in his back pocket from venture capital titans Andreessen Horowitz.
With about 777 locations and 906,000 desks across 39 countries, WeWork’s vast empire of co-working space is in limbo.
Investors are glued to their screens, awaiting the next act of this corporate drama, with the question on everyone’s lips: Is this the end of WeWork as we know it?
