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WEWORK: SHARES SLIDE AS IT RAISES 'SUBSTANTIAL DOUBT' OVER FUTURE

Published
9 August

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Image source, Getty Images
By Annabelle Liang
Business reporter


Shares in WeWork, the once globally-hyped office space-sharing company, have
plunged after it raised "substantial doubt" about its future.

The company's shares fell by close to 24% in extended trading in New York.

The firm said that it needed to raise additional capital to keep it afloat over
the next 12 months.

WeWork, which is backed by Japanese tech giant Softbank, was hit hard by the
pandemic as social distancing rules drove people to work from home.

However, it has yet to turn a profit, even after workers returned to offices as
coronavirus restrictions eased.

On Tuesday, WeWork said in a statement that it faced challenges including softer
demand and a "difficult" operating environment.



"Substantial doubt exists about the company's ability to continue as a going
concern," the firm said.

It added: "The company's ability to continue as a going concern is contingent
upon successful execution of management's plan to improve liquidity and
profitability over the next 12 months."

The plan involves raising additional capital through the issuance of stocks or
bonds, or asset sales.

The management will also move to reduce rental costs and limit capital
expenditures, WeWork said.

 * Zoom orders workers back to the office
 * Four in 10 Londoners switch to hybrid work - data

WeWork currently has 512,000 members at its workspaces in 33 countries around
the world.

The company's first attempt to go public collapsed in 2019 over concerns about
its business model and co-founder Adam Neumann's leadership style.



It was listed two years later in a deal that valued WeWork at $9bn. That was
roughly a fifth of its estimated value in 2019.

The firm has also struggled to cope with troubles in the technology sector.

It has seen the exits of several top executives this year, including that of
former chief executive and chairman Sandeep Mathrani.

In March, WeWork said it had struck deals with Softbank and other investors to
reduce its debt by around $1.5bn.

Shares in the company have fallen by more than 95% in the last year. Shares fell
by almost a quarter in extended trading on Wednesday to $0.21 (£0.16).


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