WeWork, the flexible workspace provider, is planning to file for bankruptcy as early as next week, according to a source familiar with the matter. The company, which was once valued at $47 billion, has been struggling with a massive debt pile and hefty losses for years.
WeWork’s bankruptcy filing would mark a stunning reversal of fortune for the company and a black spot for its major backer, Japanese conglomerate SoftBank, which has sunk tens of billions of dollars into the startup.
WeWork’s woes began in 2019, when its plans to go public imploded following investors’ skepticism over its business model and concerns about its hefty losses. The company has since been in turmoil, with numerous top executives departing, including CEO Sandeep Mathrani, who resigned in June.
WeWork’s shares plummeted b 32% during extended trading, in the wake of the Wall Street Journal’s initial report. These shares have seen a 96% drop in value over the course of this year.
Reports suggest that WeWork is contemplating filing for Chapter 11 bankruptcy in New Jersey, a decision that has been met with mixed reactions from those close to the situation.
The sources for this piece include an article in Reuters.