WeWork shares sink to report low on reviews chapter submitting imminent
An indication marks a WeWork location in Boston, Massachusetts, U.S., August 14, 2023. REUTERS/Brian Snyder Acquire Licensing Rights
Nov 1 (Reuters) – WeWork (WE.N) shares tanked almost 50% to a report low on Wednesday following media reviews that the versatile workspace supplier was planning to file for chapter as early as subsequent week.
The New York-based agency, combating a heavy debt load and hefty losses for a couple of years now, was as soon as privately valued at $47 billion and now has a market capitalization of nearly $121 million.
The potential chapter submitting would observe a sequence of setbacks for the SoftBank-backed firm since its IPO plans imploded in 2019 on skepticism over its enterprise mannequin of taking long-term leases and renting them for brief time period.
WeWork, which lastly went public in 2021 at a a lot decreased valuation than initially anticipated, stays a black spot for SoftBank that sunk billions in efforts to prop up the startup that has by no means turned a revenue.
WeWork is mulling over submitting a Chapter 11 petition in New Jersey, the Wall Avenue Journal first reported on Tuesday.
The corporate decided to withhold curiosity fee due on Nov. 1 on senior notes due 2025, even because it has the money to make the fee, it mentioned on Tuesday. WeWork had warned it might go bankrupt in August.
“Whether or not or not WeWork can attain a short-term lodging with bondholders to stave off a near-term chapter, it possible holds many long-term workplace leases that may must be restructured or written off,” mentioned Jason Benowitz, senior portfolio supervisor at CI Roosevelt Non-public Wealth in New York.
“WeWork stays a big tenant in some main city workplace markets and its failure or restructuring might additional weigh on business fundamentals.”
The inventory was final buying and selling at a historic low of $1.18, the newest in a string of report lows, after shedding about 96% of its worth this 12 months.
Reporting by Medha Singh in Bengaluru; Enhancing by Shinjini Ganguli and Shounak Dasgupta
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