WeWork could file for bankruptcy as early as next week, according to Reuters and the Wall Street Journal. Frankly, we are not surprised at this result for the former venture darling.
WeWork’s shares were down 49.7% in early morning trading on Wednesday, bringing its market capitalization to just $61 million. That’s a ludicrous drop considering this company raised more than $7.09 billion in equity capital while private.
The Exchange explores startups, markets and money.
Read it every morning on TechCrunch+ or get The Exchange newsletter every Saturday.
In August, the company expressed doubts about its ability to continue as a going concern, which is business-speak for “the wheels are coming off this damn car and it’s not looking good.” And in October, WeWork paused certain debt payments and later negotiated a little more time for itself.
Last month, WeWork missed interest payments to its bondholders and was granted 30 days to make them, according to a securities filing. Then this Monday, the company said it had begun discussions with “certain stakeholders in its capital structure” such as SoftBank and Goldman Sachs about improving its balance sheet as it took steps “to rationalize its real estate footprint.”
The going concern warning and the moves to retool its indebtedness are clear indications that things are not going well at WeWork.
Let’s take a quick dive into the current state of WeWork’s finances, leaning on data through the end of Q2 2023. The data still tells a very simple story. Walk with me: