WeWork to file for bankruptcy

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gwb-trading

Reflective of the broader commercial real estate market, WeWork will be filing for bankruptcy. There were questions -- even before the pandemic shut down onsite work -- if the flexible workspace business concept behind WeWork was actually viable in the long term. Plus there were a number of unique problems WeWork had.

The broader question is when (and if) the commercial real estate sector will recover. Will CEOs demands that employees return to work drive a resurgence? Or are commercial buildings just doomed to be converted into warehouses and residences? What about all the REITs that invest in the commercial real estate sector -- time to go long or to short?

WeWork to file for bankruptcy after once being valued at $47B: report
https://nypost.com/2023/10/31/business/wework-to-file-for-bankruptcy-it-was-once-valued-at-47b/

Flexible workspace provider WeWork plans to file for bankruptcy as early as next week, a source familiar with the matter said on Tuesday, in a stunning reversal of fortune for a company that was once privately valued at $47 billion.

Shares of the company fell 30% in extended trading after the Wall Street Journal first reported the news.

They have fallen roughly 96% this year.

New York-based WeWork is considering filing a Chapter 11 petition in New Jersey, the WSJ reported, citing people familiar with the matter.

WeWork did not immediately respond to a Reuters request for comment.

Earlier on Tuesday, the debt-laden firm decided to withhold interest payment of about $6.4 million.

The company has been in turmoil ever since its plans to go public in 2019 imploded following investors skepticism over its business model of taking long-term leases and renting them for the short term and on worries over its hefty losses.

WeWork’s woes did not abate in subsequent years.

It finally managed to go public in 2021 at a much-reduced valuation.

Its major backer, Japanese conglomerate SoftBank, sunk tens of billions to prop up the startup, but the company has continued to lose money.

WeWork raised “substantial doubt” about its ability to continue operations in August, with numerous top executives, including CEO Sandeep Mathrani, departing this year.

Co-founded by Adam Neumann, WeWork began operations in 2010 in New York, catering mainly to freelancers, startups and small businesses, but grew rapidly to include larger clients.
 
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From 600 to zero in just 2 years.


That was a mega trading opportunity.

Congrats to those who traded with the trend.
So who profited $47 Billion dollars?
 
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Baron said:
It seems like Covid having the effect of clearing out office buildings nationwide (and many of those workers never coming back) was the kiss of death for WeWork. They couldn't have had worse timing if they tried.
More...

Sure Covid speeded up the process, but they never had a profitable business idea. They were never even close to being profitable before Covid. Subleasing of office workplace may work in some locations but not everywhere. Their growth plans called for more office spaces that a city could provide, if I remember the tv show correctly.

Apparently SoftBank sunk 17 billions into WeWork. That is some blackhole.
 
%%
Sounds like a good name ''WE.....'';
but the bears worked + worked on thier stock price so much.
Could be why King Street Capital took such a small position??
 
This will drive the “real landlords” nuts, upstream ownership would have to write off as bad debts, and worse, find another large tenant to fill the space.
 
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