Office crisis

WeWork shares slide as trading future in doubt

We Work office Edinburgh
WeWork offices in Edinburgh (pic: Terry Murden)

Shares in the shared office space provider WeWork fell sharply last night after it raised “substantial doubt” about its ability to continue trading.

The US group said in a filing that its ability to continue as a going concern rested on its ability to raise additional capital over the coming year. Its shares plunged 33.3% in after-hours trading on Wall Street.

WeWork currently has 512,000 members at its workspaces in 33 countries and has a suite of offices in George Street Edinburgh, whose tenants include The Scotsman newspaper and the procurement business AM Bid.

It was hit hard by the switch to remote working and at the end of June it had a 72 % occupancy rate across its estate.

A survival plan includes a review of rents and tenancy costs, increasing sales, cutting churn among its members, limiting spending and seeking additional capital.

Founded in 2010 by Adam Neumann and Miguel McKelvey, WeWork was a darling of the startup community, soaring to a peak value of $47 billion.

It was forced to shelve a highly anticipated listing in New York in 2019 amid concerns over its business model and the leadership of Mr Neumann who left the group. It was rescued by its largest shareholder, SoftBank, the Japanese conglomerate, but it has yet to make a profit.

WeWork eventually went public in 2021, and is currently valued at about $450 million. Pressures, particularly over the level debt, have continued to hinder the company. Its chief executive Sandeep Mathrani left in May and it has not appointed a permanent successor.

Last night the group said: “As a result of the company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the company’s ability to continue as a going concern.”

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