Embattled office-sharing firm WeWork on Tuesday (Aug 8) warned US regulators that it is worried about its survival.
Citing financial losses, cash needs, and a drop in memberships, WeWork said in a filing with the Securities and Exchange Commission (SEC) that “substantial doubt exists about the company’s ability to continue as a going concern”.
The fate of the New York-based company depends on the “successful execution of management’s plan to improve the company’s liquidity and profitability,” it said in the filing.
WeWork’s plan for the year ahead includes restructuring, negotiating more favorable terms on leases, beefing up membership, and possibly even issuing debt or selling off assets, the SEC filing said.
WeWork has lost billions of dollars during the first six months of this year, with macroeconomic conditions weakening demand for its shared office spaces, the company told regulators.
WeWork’s share price has been below a dollar for months and fell to 16 cents in after-market trading on Tuesday.
WeWork has been trying to turn the page on Adam Neumann, its co-founder and former leader whose antics tired investors.
The company has been in trouble since Neumann’s forced departure in late 2019 following WeWork’s failed IPO, in which the company’s valuation fell from US$47 billion to less than US$10 billion.
WeWork had been a celebrated star in the sharing economy that put a mammoth footprint in the commercial real estate of major cities around the globe.
Its collapse led to Neumann’s departure and cost the main shareholder, Japanese billionaire Masayoshi Son, billions of dollars.
Source: AFP
