WeWork Face Bankruptcy Amid Increasing Debt
Office-sharing giant WeWork is reportedly on the brink of filing for Chapter 11 bankruptcy protection in New Jersey, with reports suggesting it may happen as early as next week. Its stock plunged by 32% during after-hours trading following the Wall Street Journal's report, and it has lost nearly 98% of its value this year.
WeWork's troubles began with a failed attempt to sell shares to the public in 2019, which led to the departure of its co-founder, Adam Neumann. The company also fell victim to the pandemic as remote work became the new normal during the lockdowns.
As of June, the company had a net long-term debt of almost $3 billion and faced more than $13 billion in long-term leases. WeWork had reached an agreement with creditors to temporarily delay some debt payments, but the grace period is ending.
WeWork's fall from grace has been dramatic. Once valued at $47 billion, it is now trading at a fraction of that value, with shares down nearly 98% this year. The Japanese company SoftBank, a major investor, has struggled to keep the company afloat.
Despite its initial promise as the future of office space, WeWork's rapid expansion and financial missteps have brought it to the brink of bankruptcy. The company has yet to comment.
