Shares of office-space leasing company WeWork — once valued at $47 billion — plummeted Wednesday to mere pennies after the corporate warned that “substantial doubt exists” in regards to the its survival.
The pioneering co-working company, founded by eccentric Israeli entrepreneur Adam Neumann, suffered a net lack of $397 million within the three months ended June 30, in line with its second-quarter earnings report released after the market closed Tuesday.
WeWork stock plunged greater than 25% after the opening bell to trade at just 16 cents a share — dropping its market cap to $335 million. It’s stock has nosedived greater than 95% because it went public in 2021.
Interim CEO David Tolley — who took over after Sandeep Mathrani’s unexpected exit — blamed WeWork’s lackluster performance on “excess supply in business real estate, increasing competition and macroeconomic volatility.”
Tolley said that these aspects drove members away greater than the corporate anticipated.
WeWork’s management added that “because of this of our losses… substantial doubt exists in regards to the company’s ability to proceed as a going concern.”
WeWork included a going-concern warning in its second-quarter earnings report released Tuesday, which also revealed that the office-space leasing company recorded a net lack of $397 million for the three-month period.REUTERS
The corporate added that its future depends “upon successful execution of management’s intended plan over the following 12 months.”
Representatives for WeWork didn’t immediately reply to The Post’s request for comment.
The corporate’s value shot up from $17 billion to $47 billion in 2019 — the 12 months before the pandemic emptied office buildings and sparked the work-from-home phenomenon — when Japanese conglomerate SoftBank’s invested in Neumann’s brain-child with plans to take it public.
On the time, WeWork operated 850 locations across 30-plus countries.
The corporate has been struggling since its failed attempt at an initial public offering in 2019, when it was revealed that co-founder Adam Neumann was fostering a questionable work culture where tequila and marijuana were plentiful.Visual China Group via Getty Images
Nevertheless, all of it got here crashing down by September of that 12 months when investors criticized Nuemann for selling nearly 30% of the corporate’s equity to SoftBank and its associated funds for an unrealistic price.
The IPO failed and value Neumann his job, though his exit deal made him a billionaire.
It was also revealed that Neumann ran a shoddy ship, which allegedly included drugs, alcohol and parties as an enormous a part of the work culture.
In accordance with a report by The Wall Street Journal, Neumann said he likes tequila to flow freely, and would take executive retreats where he’d pour guests glasses of $110-per-bottle Don Julio 1942 to begin the morning.
WeWork has been decreasing its portfolio since its peak in 2019 — when it was valued at $47 billion and operated 850 office spaces. It currently operates 717 co-working offices.Bloomberg via Getty Images
His friends and former colleagues also told the outlet that Neumann enjoyed smoking marijuana, and would often smoke while airborne in his Gulfstream G650 private jet.
WeWork has been decreasing its portfolio since Neumann’s departure and went public in 2021 through a special purpose acquisition company.
In accordance with its website, WeWork currently operates 717 co-working offices.
