WeWork, the once high-flying SoftBank-backed company, is teetering on the edge of bankruptcy, signaling a dramatic fall from grace. Shares of the flexible workspace provider have plummeted by approximately 96% this year, as it grapples with a staggering debt burden and mounting losses.
In a significant development, WeWork is expected to file for bankruptcy as early as next week, a reliable source revealed. The impending Chapter 11 filing, possibly in New Jersey, is seen as a last-ditch effort to salvage the company from its financial quagmire.
WeWork has been navigating tumultuous waters for years, beginning with its ill-fated attempt to go public in 2019. Investors raised concerns over its unconventional business model, which involved securing long-term leases and subletting space on short-term agreements, all while incurring substantial losses.
This impending bankruptcy would represent a major setback for SoftBank, which had invested billions in WeWork. The company's debt load and long-term lease commitments, coupled with rising borrowing costs, have compounded its woes.
WeWork's descent from a lofty valuation of $47 billion in 2019 to the brink of bankruptcy is a stark reminder of the challenges posed by the flexible office space industry. With this bankruptcy filing on the horizon, WeWork's future remains uncertain, and its once shining star has dimmed considerably.