The fall and rise and fall of WeWork

When a company's bonds trade at 30 cents on the dollar, that's a good sign the market thinks it's toast. That's the average amount that bondholders recover in the event of a default and/or bankruptcy.

Why it matters: Using that yardstick, WeWork was toast in March 2020. But then the bonds staged an astonishing comeback, climbing from 30 cents in March 2020 to 104 cents in June 2021.

Between the lines: It's still not entirely clear whether the pandemic really killed WeWork, as bond traders expected it to in 2020.

• On the one hand, the work-from-home revolution and the broad decline in office occupancy has clearly hurt the WeWork business.
• WeWork's leases are much shorter than those of most office landlords, meaning that WeWork is exposed in a way that most landlords aren't to the risk that a huge proportion of its tenants can just move out at any time.
• On the other hand, as Axios' Javier E. David reports, other coworking companies, like IWG and Industrious, seem to be doing very well in the same industry with the same business model.

Either way, WeWork does now seem to be toast. Its CEO says that "substantial doubt exists about the company's ability to continue as a going concern"; its stock is trading at less than 20 cents, down from $11.78 on its first day of trading in October 2021; and its bonds have imploded to just 11 cents on the dollar, per FactSet.

The bottom line: Coworking spaces aren't dead. But WeWork probably is.