The communal office space company WeWork has filed for bankruptcy protection and announced plans to reorganize. (Photo courtesy of WeWork)
Nov. 7 (UPI) — Once valued at more than $47 billion, the once hip and high flying communal office-sharing company WeWork has filed for protection from creditors in bankruptcy court.
The former real estate darling was valued at less than $45 million a few days ago.
Its stock price has fallen more than 98% since the start of the year.
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet,” said David Tolley, WeWork CEO, in a news release. “We remain committed to investing in our products, services, and world-class team of employees to support our community.”
The near total work-from-mandate during the COVID-19 pandemic shuttered the global economy and left most of the world’s office space idle and empty, threatening to wreck the very foundation on which WeWork was based, ultimately leading to the company’s spiral into bankruptcy.
The pandemic and business office shutdown coincided with a failed attempt by WeWork to go public in 2019, an effort that eventually fizzled when potential Wall Street investors grew skittish about the company’s leadership, governance and financial stability based on the company’s staggering financial losses.
At that time, the company was valued at $47 in a funding round led by Masayoshi Son’s SoftBank. Now, the company lists liabilities ranging between $10 billion and $50 billion, according to a bankruptcy filing.
“I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement,” Tolley said.
WeWork was founded in 2010 by Adam Neumann and Miguel McKelvey. It opened its maiden location in Lower Manhattan in 2011. With a focus on leasing rather than buying office space, the company attracted freelancers, small businesses and larger corporations who, despite completely different customer bases, goals and budgets, could share office space.
Fostering a casual and collegial atmosphere, WeWork buildings often featured free craft beer on tap, mixers and open concept gathering areas where employees from different companies could meet and mingle.
Former CEO and co-founder Adam Neumann called the bankruptcy filing “disappointing.”
“It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before,” Neumann said in a statement to CNBC. “I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”
The company leases millions of square feet of office space in 777 locations around the world, according to its regulatory filings.