News Update


WeWork: Shares fall as the company raises’substantial question’ about its future

In extended trading in New York, the company’s shares dropped by about 24%.

The company also stated that its management needs to raise extra funds to keep the company afloat for the next 12 months.

WeWork, which is backed by Japanese tech behemoth Softbank, was heavily damaged by the pandemic, which forced individuals to work from home due to social distance restrictions.

Even after workers returned to offices and coronavirus limitations were lifted, it has failed to earn a profit.

WeWork said in a statement on Tuesday that it was facing issues such as weaker demand and a “difficult” operating climate.

“Substantial doubt exists about the company’s ability to continue as a going concern,” the firm stated.

“The company’s ability to continue as a going concern is contingent on management’s plan to improve liquidity and profitability over the next 12 months,” it added.

The plan include obtaining more funds through the sale of assets or the issuance of stocks or bonds.

According to WeWork, management will also take steps to minimize rental expenses and limit construction spending.

WeWork presently has 512,000 members in its workspaces in 33 countries.

The company’s first public offering failed in 2019 due to concerns about its business strategy and co-founder Adam Neumann’s leadership style.

It was listed two years later in a deal worth $9 billion to WeWork. That was nearly one-fifth of its 2019 anticipated worth.

The company has also had to deal with issues in the technology industry.

This year has seen the departure of several key executives, including former CEO and Chairman Sandeep Mathrani.

WeWork announced in March that it has reached agreements with Softbank and other investors to lower its debt by approximately $1.5 billion.


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