WeWork plans to file for bankruptcy as early as next week, causing significant losses for SoftBank
On November 1st, according to insiders on Tuesday, WeWork, a shared office enterprise, plans to file for bankruptcy as early as next week. This company, supported by Japanese Softbank, is facing huge debts and losses
On November 1st, according to insiders on Tuesday, WeWork, a shared office enterprise, plans to file for bankruptcy as early as next week. This company, supported by Japanese Softbank, is facing huge debts and losses.
WeWork's stock price fell 32% in post market trading after the news was released. Since the beginning of this year, the stock price has fallen by about 96%.
The report quoted sources familiar with the matter as saying that WeWork, headquartered in New York, is considering applying for bankruptcy protection in New Jersey, USA.
WeWork declined to comment on this.
Earlier on Tuesday, WeWork stated that it had reached an agreement with creditors to temporarily postpone the payment of some of the debt due soon.
As of the end of June this year, WeWork's net long-term debt was $2.9 billion, with long-term leases exceeding $13 billion. In addition, against the backdrop of rising borrowing costs in the commercial real estate industry, this has brought more troubles to the company.
WeWork's bankruptcy filing will be a stunning reversal of the company's fate. In 2019, the company's private valuation reached $47 billion, which was a significant loss for investors at SoftBank.
Since the failure of the planned listing in 2019, WeWork has been in trouble. Investors are skeptical of its business model of long-term leasing and short-term leasing, and are concerned about its huge losses.
The dilemma of WeWork did not ease in the following years. In the end, the company successfully went public in 2021, but its valuation significantly decreased. Japan's Softbank Group, as its main supporter, has invested billions of dollars to support this startup, but the company is still continuing to suffer losses.
In August of this year, WeWork expressed "serious doubts" about its ability to continue operating, and several executives resigned, including CEO Sandeep Mathrani.
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