: WeWork plans to file for bankruptcy, WSJ reports; stock plunges

by | Oct 31, 2023 | Stock Market

Shares of WeWork Inc. plummeted after hours on Tuesday after a report that the once-hot co-working-space provider plans to file for bankruptcy protection as early as next week. The news, reported by the Wall Street Journal on Tuesday, comes after the convulsions to office work and the commercial real estate market following the pandemic, and after WeWork’s
once lofty vision for a new workplace culture collapsed under questions about its finances and corporate structure.

The Journal reported that WeWork was weighing a filing for chapter 11 protection in New Jersey. WeWork, when reached, would not confirm the report, saying it did not “comment on speculation.” Shares nosedived about 42% in after-hours trade on Tuesday. The stock has fallen 97% so far this year, amid struggles to pay its bills and efforts to renegotiate its leases. WeWork in August said there was “substantial doubt” about its ability to stay in business. At that time, David Tolley, then interim chief executive, warned of “excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility,” along with “softer demand.” During the second quarter, WeWork lost $397 million. It said it had $680 million of liquidity, $205 million of which was cash. Tolley this month became WeWork’s permanent chief executive. Chief Operating Officer Anthony Yazbeck also left the company this month. Earlier on Tuesday, WeWork entered into a seven-day forbearance agreement with bondholders, after a 30-day grace period on interest payments expired. The company skipped interest payments on some of its bonds earlier this month in an effort to buy itself more time to talk over options with its lenders and preserve some of its liquidity. Creditors include SoftBank’s Vision Fund II and Goldman Sachs International Bank. SoftBank
has been a major backer …

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