Embattled office-sharing firm WeWork has warned U.S. 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) on Tuesday 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 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 $47 billion to less than $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.
© 2023 AFP
5 Comments
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robert maes
About time. Nothing but hot air. Overpriced and overhyped. Everything costs extra money. The business model was ripping off real estate owners and clients
kaimycahl
Wework has been rebranded as "WeBROKE"
JeffLee
Ten billions of Saudi money managed by Masayoshi Son evaporates into thin air. I love it. Those two deserve each other.
Is the movie out yet? One of the greatest business failures of all time is an extraordinary story.
Sh1mon M4sada
Could have gone either way TBH, WW could have dominated commercial office, but Softbank and Neumann underestimated the power of the REITs. Then came covid ...
Glad they failed though, could have been very ugly if they had won.
GBR48
The basic concept of sharing office space was and is fine. The implementation was a financial horror show. The decision to purchase by Softbank was comparable to Musk's purchase of Twitter. Due diligence exists for a reason.