Techcrunch: “ WeWork goes from $47B valuation to ‘substantial doubts’ about its future”

Mary Ann Azevedo, for Techcrunch:

WeWork is struggling to survive in a post-pandemic world.

In announcing its earnings today, the flexible space provider said that “substantial doubt exists about the company’s ability to continue as a going concern.”

WeWork has faced a number of challenges for years now, and with so many companies abandoning office space and more people being able to work remotely, demand for its co-working spaces has steadily declined over time.

Today, the 13-year-old company announced a net loss of $397 million for the second quarter on revenue of $877 million. While revenue was up 4% year-over-year, WeWork interim CEO David Tolley noted in a statement: “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships.”

As such, WeWork went on to say its ability to continue operating is contingent upon “successful execution of management’s plan to improve liquidity and profitability over the next 12 months.”

Those efforts include cutting rent and tenancy costs via restructuring actions and negotiation of more favorable lease terms; increasing revenue by reducing member churn and increasing new sales; controlling expenses and limiting capital expenditures; and seeking additional capital via issuance of debt or equity securities or asset sales.

WeWork’s stock was down 33% after hours to 13 cents, after closing at 21 cents. By Wednesday morning, it was trading at 14 cents, with a market cap of $300 million. At its prime, WeWork was valued at a staggering $47 billion after raising $1 billion in its SoftBank-led Series H round in January 2019.