WeWork admits "substantial doubt" about its survival
WeWork's admission Tuesday that the company may not survive is a stunning reversal from what was once one of the most valuable startups in the world.
Driving the news: The shared-office space company said in its quarterly results that greater competition, lower demand, and uncertain economic conditions contributed to its losses.
- Interim CEO David Tolley said on the earnings call: "As a result of our losses … which have been impacted by the recent increases in member churn … substantial doubt exists about the company's ability to continue as a going concern."
Flashback: This is the same company that was once led by the charismatic and controversial Adam Neumann, and was valued at $47 billion in 2018, when its business expanded across the U.S.
Zoom in: WeWork's IPO was one of the most anticipated listings of 2019 but doubts about the quality of its business derailed the offering. The company ultimately went public via a SPAC in 2021.
Of note: Softbank was an early backer of Neumann and his startup, and yet the investment was one of many that the Japanese holding company saw evaporate over a short stretch of time.
What we're watching: Whether the company, which is now valued at around $450 million and is trading at 21 cents per share on the New York Stock Exchange, can keep its lights on, or will vanish along with all of that market value.