WeWork prepares to file for bankruptcy next week
WeWork prepares to file for bankruptcy next week
The company was founded by Israeli Adam Neumann in 2010 and has suffered a spectacular fall from grace since its $47 billion peak in 2019
WeWork is planning to file for bankruptcy as early as next week, according to a Reuters report that cites someone familiar with the matter. The SoftBank-backed company has been struggling with a large debt pile and hefty losses in recent years.
Shares of the flexible workspace provider fell as much as 32% in extended trading after the news was first reported by the Wall Street Journal. In 2023, shares have fallen roughly 96% in total.
WSJ had reported that the New York-based WeWork is considering filing a Chapter 11 petition in New Jersey. However, the company has declined to comment.
WeWork was founded by Israeli Adam Neumann in 2010 and reached its extraordinary peak in 2019 when it was privately valued at $47 billion. However, the company has been in turmoil ever since its plans to go public in 2019 imploded following investors' skepticism over its business model of taking long-term leases and renting them for the short term as well as worries over its hefty losses.
When the company finally went public two years later, its major backer, Japanese conglomerate SoftBank, had to sink tens of billions to prop up the startup, but the company has continued to lose money.
WeWork raised "substantial doubt" about its ability to continue operations in August, with numerous top executives, including CEO Sandeep Mathrani, departing this year.
WeWork Israel is a privately held Israeli company owned by the Ampa Group and therefore is not legally or financially affected by the situation of the American company.
