WeWork’s shares plunge 37% on bankruptcy reports | CNN

The company WeWork is heading towards filing for Chapter 11 bankruptcy protection in New Jersey after shares slipped to 37% in pre-market trading. This month the company announced it had agreed with creditors to extend a 30-day grace period to complete interest payments on some of its debt that was due. According to the company’s timeline, the new “forbearance agreement” is set to terminate early this month. Moreover, a Chapter 11 filing would mark a reversal of fortunes for the company, which was valued at $47 billion in 2019. Allegedly, the company’s downfall had been years in the making, due to its struggle to recover from a botched IPO in 2019. During this time, paperwork indicated larger than anticipated losses and possible conflicts of interest related to the company’s founder and then-CEO- Adam Neumann. Nevertheless, the company went public two years later at a valuation of over $8 billion and has continued to burn through cash and struggled to retain members. In August, the company said “substantial doubt exists” about its ability to stay in business.

WeWork’s shares have plunged 96% this year amid ongoing losses and a massive debt pile, which has become more costly to service as borrowing costs have risen on the back of interest rate hikes by central banks.

Source: WeWork’s shares plunge 37% on bankruptcy reports

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