WeWork plans to file for bankruptcy as early as next week, source says

WeWork plans to file for bankruptcy as early as next week, source says

WeWork is planning to file for bankruptcy as early as next week, according to a source familiar with the matter. The company, backed by SoftBank Group, is struggling with a large amount of debt and significant losses. The news caused shares of WeWork to fall 32% in extended trading, bringing their total decline for the year to approximately 96%.

The Wall Street Journal reported that WeWork is considering filing a Chapter 11 petition in New Jersey. However, WeWork declined to comment on the matter. Earlier on Tuesday, the company announced that it had reached an agreement with creditors to temporarily postpone payments for some of its debt. However, the grace period for these payments is coming to an end.

As of June, WeWork had a net long-term debt of $2.9 billion and over $13 billion in long-term leases. These financial obligations, combined with rising borrowing costs, have put significant pressure on the company. WeWork’s potential bankruptcy filing would be a major setback for a company that was once valued at $47 billion in 2019 and a significant loss for investor SoftBank.

WeWork has faced turmoil since its failed attempt to go public in 2019. Investors were skeptical of its business model, which involved taking long-term leases and subleasing them for the short term, and concerned about its substantial losses. Despite efforts to go public in 2021 at a lower valuation, WeWork has continued to struggle financially. In August, the company raised doubts about its ability to continue operations and saw several top executives, including CEO Sandeep Mathrani, depart.

In conclusion, WeWork’s potential bankruptcy filing reflects a dramatic turn of events for the company and a significant setback for SoftBank. The company’s financial troubles have persisted despite efforts to address them, and its future remains uncertain.

About News Team

Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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