WeWork shares plummeted more than 38 per cent in extended trading after citing sustained losses and cancelled memberships to its office spaces.
The co-working business, which had a $47 billion valuation four years ago, has said it has “substantial doubt” about its ability to continue operating.
Over the next 12 months the company will focus on reducing rental costs, negotiating more favourable leases, increasing revenue and raising capital, it said on Tuesday.
The warning comes mere months after WeWork struck a deal with some of its biggest creditors and SoftBank to cut its debt load by around $1.5 billion and extend other maturities.
Its bonds trade at deeply distressed levels. The company’s 7.875 per cent unsecured notes due 2025 last changed hands for 33.5 cents on the dollar, according to data from Trace.
Just a few years ago, WeWork was one of America’s most valuable start-ups.
Venture capitalists fuelled its rise with billions of dollars to rent office property around the world and lease it back to workers.
The co-founder Adam Neumann led a disastrous attempt at an initial public offering in 2019, resulting in his removal as chief executive and necessitating a financial rescue from its major backer, SoftBank Group.
The Covid-19 pandemic dealt another blow. WeWork’s office locations, which emptied during the early months of the health emergency, were showing slow progress towards filling back up over the last year.
But the recovery appears so far to be unsustainable. WeWork said occupancy had dropped in the second quarter compared to the previous quarter.
The New York-based company has also been weathering a change in leadership. Sandeep Mathrani, who took over as chief executive in early 2020, left in May to become a partner at private equity firm Sycamore Partners.
WeWork currently has an interim chief executive.
On Tuesday, WeWork said three of its independent board members were being replaced by four new board members.
England's Ashes squad
Joe Root (captain), Moeen Ali, Jimmy Anderson, Jofra Archer, Jonny Bairstow, Stuart Broad, Rory Burns, Jos Buttler, Sam Curran, Joe Denly, Jason Roy, Ben Stokes, Olly Stone, Chris Woakes.
How England have scored their set-piece goals in Russia
Three Penalties
v Panama, Group Stage (Harry Kane)
v Panama, Group Stage (Kane)
v Colombia, Last 16 (Kane)
Four Corners
v Tunisia, Group Stage (Kane, via John Stones header, from Ashley Young corner)
v Tunisia, Group Stage (Kane, via Harry Maguire header, from Kieran Trippier corner)
v Panama, Group Stage (Stones, header, from Trippier corner)
v Sweden, Quarter-Final (Maguire, header, from Young corner)
One Free-Kick
v Panama, Group Stage (Stones, via Jordan Henderson, Kane header, and Raheem Sterling, from Tripper free-kick)
Innotech Profile
Date started: 2013
Founder/CEO: Othman Al Mandhari
Based: Muscat, Oman
Sector: Additive manufacturing, 3D printing technologies
Size: 15 full-time employees
Stage: Seed stage and seeking Series A round of financing
Investors: Oman Technology Fund from 2017 to 2019, exited through an agreement with a new investor to secure new funding that it under negotiation right now.
Moon Music
Artist: Coldplay
Label: Parlophone/Atlantic
Number of tracks: 10
Rating: 3/5
UAE currency: the story behind the money in your pockets
BORDERLANDS
Starring: Cate Blanchett, Kevin Hart, Jamie Lee Curtis
Director: Eli Roth
Rating: 0/5
SPEC SHEET
Display: 10.4-inch IPS LCD, 400 nits, toughened glass
CPU: Unisoc T610; Mali G52 GPU
Memory: 4GB
Storage: 64GB, up to 512GB microSD
Camera: 8MP rear, 5MP front
Connectivity: Wi-Fi, Bluetooth 5.0, USB-C, 3.5mm audio
Battery: 8200mAh, up to 10 hours video
Platform: Android 11
Audio: Stereo speakers, 2 mics
Durability: IP52
Biometrics: Face unlock
Price: Dh849
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Jetour T1 specs
Engine: 2-litre turbocharged
Power: 254hp
Torque: 390Nm
Price: From Dh126,000
Available: Now
ELIO
Starring: Yonas Kibreab, Zoe Saldana, Brad Garrett
Directors: Madeline Sharafian, Domee Shi, Adrian Molina
Rating: 4/5
Our family matters legal consultant
Name: Hassan Mohsen Elhais
Position: legal consultant with Al Rowaad Advocates and Legal Consultants.
Company%20Profile
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
UAE currency: the story behind the money in your pockets