WeWork goes from a $47B valuation to ‘substantial doubts’ about its ‘ability to continue as a going concern’


Share post:

WeWork is struggling to survive in a post-pandemic world.

In announcing its earnings today, the flexible space provider said that “substantial doubt exists about the company’s ability to continue as a going concern.”

WeWork has faced a number of challenges for years now, and with so many companies abandoning office space and more people being able to work remotely, demand for its co-working spaces has steadily declined over time.

Today, the 13-year-old company announced a net loss of $397 million for the second quarter on revenue of $877 million. While revenue was up 4% year-over-year, WeWork interim CEO David Tolley noted in a statement: “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships.”

As such, WeWork went on to say its ability to continue operating is contingent upon “successful execution of management’s plan to improve liquidity and profitability over the next 12 months.”

Those efforts include cutting rent and tenancy costs via restructuring actions and negotiation of more favorable lease terms; increasing revenue by reducing member churn and increasing new sales; controlling expenses and limiting capital expenditures; and seeking additional capital via issuance of debt or equity securities or asset sales.

WeWork’s stock was down 33% after hours to 13 cents, after closing at 21 cents with a mere $166 million valuation. At its prime, WeWork was valued at a staggering $47 billion after raising $1 billion in its SoftBank-led Series H round in January 2019.

Co-founder and then-CEO Adam Neumann notoriously stepped down later that year amid allegations of a toxic combination of arrogance and poor management. WeWork has since been very publicly trying to redeem itself and turn around investor — and public — perception.

TechCrunch reported on some of those efforts to reinvent itself before it went public in October of 2021, but clearly those efforts haven’t panned out as hoped.

WeWork has raised over $22 billion in funding (including debt) from investors such as SoftBank, Insight Partners, BlackRock and Goldman Sachs, among others, according to Crunchbase.

Source link

Lisa Holden
Lisa Holden
Lisa Holden is a news writer for LinkDaddy News. She writes health, sport, tech, and more. Some of her favorite topics include the latest trends in fitness and wellness, the best ways to use technology to improve your life, and the latest developments in medical research.

Recent posts

Related articles

The writers strike is over; here’s how AI negotiations shook out

After almost five months, the Writers Guild of America (WGA) has reached an agreement with Hollywood studios...

Atlassian CTO: We were late moving to the cloud, on the ball with AI

“I’m responsible for all of engineering at Atlassian,” Rajeev Rajan said in our interview onstage at TechCrunch...

What is Amazon’s [redacted] ‘Project Nessie’ algorithm?

The FTC’s lawsuit against Amazon alleging anti-competitive practices is largely full of things we already knew in...

Sources: Palo Alto in advanced talks to buy Talon and Dig in a $1B security sweep

Palo Alto Networks’ stock price has been on the rise on the back of strong earnings and...

Talkdesk conducts third round of layoffs in less than 14 months

Talkdesk, a company once valued at $10 billion that sells software to help large corporations improve customer...

OpenAI is reportedly raising funds at a valuation of $80 billion to $90 billion

OpenAI is in discussions to possibly sell shares in a move that would boost the company’s valuation...

YouTube relaxes advertiser-friendly guidelines around controversial topics, like abortion, abuse and eating disorders

YouTube today announced an update to its advertiser-friendly guidelines that relaxes some of its rules around controversial...

FCC announces plans to reinstate net neutrality

Net neutrality is back on the menu, citizens. After a long, long battle ending in eventual defeat...