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WeWork Files for Bankruptcy Amid Glut of Empty Offices https://www.nytimes.com/2023/11/06/business/wework-bankruptcy.html

nytimes.com

https://www.theguardian.com/business/2023/nov/06/wework-shares-suspended-bankruptcy

WeWork shares suspended as investors brace for bankruptcy filing

Shares in the company, which raised ‘substantial doubt’ over its future in August, are down 98% this year

„according to people familiar with the matter“ 🧐

WeWork plans to file for chapter 11 bankruptcy as early as next week. In an August statement, the company admitted there’s “substantial doubt” WeWork will be able to stay in business, citing a “slight decline in memberships” and “increasing competition.” The statement blamed an increasing supply of commercial real estate that’s given consumers more options. As of June, WeWork maintained 777 locations across 39 countries, including 229 locations in the U.S., according to securities filings. WeWork has an estimated $10 billion in lease obligations due starting from the second half of this year through the end of 2027 and an additional $15 billion starting in 2028, according to public filings. The company burned through $530 million during the first six months of 2023 and had around $205 million of cash on hand as of June, according to securities filings.https://forbes.com/sites/willskipworth/2023/10/31/wework-may-declare-bankruptcy-next-week-report-says/?sh=24bdcb9d2f9a

https://www.wsj.com/articles/wework-plans-to-file-for-bankruptcy-as-early-as-next-week-1fdcb6a5?mod=hp_lead_pos4

@EriIshikawa The moment WeWork filed for bankruptcy is significant as it reveals the extent of their problems. It's important to mention that their worth was valued at $47 billion a years ago. They now have a staggering debt of $18.7 billion. This bankruptcy primarily impacts their activities, in the United States. It seems to be the outcome of challenging circumstances they have faced such, as the impact of COVID 19, a decrease in demand for office spaces due to the rise, in remote work popularity and challenges stemming from their rapid expansion during earlier stages.

This situation must be really confusing and worrying for the employees of WeWork. It's obvious that the company needs to undergo changes in order to survive. In order to determine their steps it's absolutely crucial for them to work out settlements, with the companies that hold most of their debt. The fact that they have filed for bankruptcy shows that they need to make adjustments before they can recover from this crisis and regain some stability again.

Grantham-Philips, W. (2023, November 7). WeWork, once valued at close to $50 billion, files for bankruptcy | AP News. AP News. https://apnews.com/article/wework-bankruptcy-be8c36b9720377334645e37c73d55e6e

Weatherbed, J., & Lawler, R. (2023, November 7). WeWork files for bankruptcy. The Verge. https://www.theverge.com/2023/11/6/23948568/wework-bankruptcy-filing-chapter-11

https://www.reuters.com/markets/deals/wework-plans-file-bankruptcy-early-next-week-wsj-2023-10-31/

WeWork plans to file for bankruptcy as early as next week- WSJ

Flexible workspace provider WeWork plans to file for bankruptcy as early as next week, the Wall Street Journal reported on Tuesday, citing people familiar with the matter.

Any new information here?

https://manifold.markets/ben/who-will-wework-announce-bankruptcy?r=YmVu

Who will WeWork announce bankruptcy by the end of 2024?

50% chance. Will resolve to YES if WeWork files for bankruptcy by the end of 2024.

@house of hazards Thanks for staying up to date on their financial status.

https://apnews.com/article/wework-reverse-stock-split-e7c726428771d8d474b80ff93591f673

WeWork moves ahead with 1-for-40 reverse stock split to maintain NYSE listing

The NYSE issued a notice to the workspace-sharing company in the spring after shares closed below an average of $1 over a 30-day trading span.

Genuinely unsure how to think about this one.

On one hand, WeWork's last 10-Q [1] said that "As a result of our losses and our projected cash needs, which have been impacted by the recent increases in member churn, combined with our current liquidity level, substantial doubt exists about the Company’s ability to continue as a going concern." Further, that 10-Q said they have $207 million cash on hand, and a loss of $349 million in the past quarter. Assuming that the negative press increases membership churn (who wants to rent in a building managed by a bankrupt landlord?) next quarter will be worse.

But on the other hand, even if they eventually go bankrupt, it might take longer than 4.5 months. And $207 million is only their cash on hand. "As of June 30, 2023, the Company had $205 million in cash and cash equivalents, including $46 million held at its consolidated VIEs, and $475 million in delayed draw note commitments, resulting in total liquidity of $680 million." If they spent all of that, at the same rate as last quarter, it would last them for 5.8 months.

[1]: https://investors.wework.com/financials/sec-filings/default.aspx

And from my (very limited) understanding, companies will sometimes make announcements like this to try use them as leverage to make deals with creditors.

@jskf Seems a risky strategy as it would make other creditors more likely to call up loans, suppliers to demand payment in advance, &c

@jskf My understanding is that they are required by law to make this disclosure. In the paragraph I quoted from, they reference the accounting standard ASC 205-40, which requires them to assess whether the company will continue to exist as a going concern.

More information about ASC 205-40 https://www.bdo.com/insights/assurance/guide-to-going-concern-assessments

Guide to Going Concern Assessments

In the wake of COVID-19, many entities across a wide variety of industries are facing extended closures, reduced access to customers, supply chain disruptions, difficulty collecting from customers and other counterparties, or other events that negatively affect operating cash flows and liquidity.