WeWork reportedly planning for bankruptcy

The co-working space provider WeWork could file for bankruptcy as early as next week in a stunning reversal of fortunes for a company that was once valued at $47 billion.

The New York-based company is considering filing a Chapter 11 petition for bankruptcy in New Jersey, according to the Wall Street Journal, which first reported the news, citing people familiar with the matter.

At the beginning of the month, it missed interest payments to its bondholders and entered a 30-day grace period to repay the debt, according to the paper.

On October 31st, the company notified the US Securities and Exchange Commission, a financial regulator, that it had reached an agreement with its creditors to extend the period for another week.

In an email to Cybernews, WeWork said it would not comment on “speculation” about its bankruptcy.

The company’s shares plummeted by more than 40% in premarket trading in New York following the Wall Street Journal report.

WeWork was founded in 2010 with the promise to reshape the traditional office environment and quickly raised billions, earning a “unicorn” status just four years later.

Japanese conglomerate SoftBank Group invested in WeWork in 2017 and continued to pour money into the company until its valuation peaked at $47 billion by 2019.

A series of missteps followed, including a disastrous attempt to sell shares to the public and the resignation of WeWork founder Adam Neumman. The pandemic has also taken its toll on the company’s business model.

By last year, WeWork lost 98% of its stock market valuation. According to the company, it still operated 777 locations in 39 countries as of June.