Shares in WeWork were suspended on Monday as Wall Street braced for the shared office space provider to file for bankruptcy.
Trading in the struggling company’s stock was halted ahead of the opening bell on the New York stock exchange, following reports it was preparing to lodge a filing for Chapter 11 protection.
By late morning in New York, with trading in other US-listed stocks well under way, WeWork had yet to release a statement.
The beleaguered company, once valued at $47bn on the private market, has endured a 98% decline in its share price this year, leaving it with a capitalization of less than $50m. In August, it raised “substantial doubt” that it could continue to operate as it grappled with $2.9bn in net long-term debt and more than $13bn in long-term leases.
WeWork, which said last week the company does not comment on speculation after the Wall Street Journal reported it was planning to file for bankruptcy protection, did not immediately respond to a request for comment on Monday’s trading suspension.
WeWork has never quite recovered from the ouster of its founder, Adam Neumann, who resigned from the company in September 2019 amid a push to go public and the remote work revolution of the coronavirus pandemic.
The attempt to list the company on the New York Stock Exchange as the We Company in 2019 included the filing of a revealing prospectus with the Securities and Exchange Commission that raised questions of the business’s long-term viability, profitability and leadership. The company would not go public until 2021. Neumann received a $445m payout package on his exit.
Founded in 2010, the company’s business involves taking long-term leases on office buildings and selling short-term memberships to offices geared towards co-working. The company was once valued at $47bn on an investment of $12.8bn, primarily from Japanese multinational SoftBank. After the publication of its S-1 prospectus, however, analysts valued the company at $10bn.
WeWork shuttered dozens of its co-working spaces in response to pandemic lockdowns, when remote working came to dominate co-working.
Its commercial real estate portfolio remains vast, however, with about 777 locations across 39 countries as of June. These housed 906,000 desks, according to the company. (Guardian US leases space from WeWork.)
WeWork raced to adapt to a post-Covid world, seeking to position itself as a specialist provider of flexible office space as businesses and their employees weighed how, and where, to work. It remained deep in the red, however, and lost $696m in the first half of this year.
Neumann, 44, has already started a new venture. Flow, which raised $350m from the Silicon Valley venture capital firm Andreessen Horowitz last year, is focused on residential real estate.