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WeWork could file away for bankruptcy as betimes as next hebdomad , according toReutersand theWall Street Journal . Frankly , we are not surprised at this result for the former speculation darling .
WeWork ’s shares were down 49.7 % in former morning trading on Wednesday , bringing its marketplace capitalization to just $ 61 million . That ’s a ludicrous drop believe this company leaven more than $ 7.09 billion in fairness capitalwhile private .
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In August , the company expresseddoubts about its ability to persist in as a going concern , which is line - speak for “ the wheels are coming off this blessed car and it ’s not look good . ” And in October , WeWorkpausedcertain debt payments and later negotiated a footling more time for itself .
Last calendar month , WeWork missed interestingness defrayment to its bondholders and was granted 30 days to make them , according to a securities filing . Then this Monday , the party tell it had begun treatment with “ certain stakeholders in its capital structure ” such as SoftBank and Goldman Sachs about amend its equipoise sheet as it took step “ to rationalise its tangible estate step . ”
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The sound concern admonition and the moves to retool its liability are open indications that things are not going well at WeWork .
Let ’s take a flying nosedive into the current res publica of WeWork ’s finances , lean on data through the end of Q2 2023 . The data still tells a very simple account . Walk with me :
All that tells a storey of sticky losses , cash burn , declining cash equalizer , and massive debt . And collapse the company ’s performance in the preceding few quarter , what did you think was going to come about ?
Show me the mortal who thought that requirement for WeWork ’s offering would improve so rapidly that it would be able to fund itself . Show me who expected an influx of enough cash to ensure the troupe had plenty of operating elbow room . Show me someone who wanted to putmoremoney into a caller that was deserving a fraction of the capital it originally raised .
A heap of family line seek to make WeWork happen after its father and CEO left the troupe . I do n’t want to be rude to the hoi polloi who prove to clean up the mint because I presume that they tried very severely . But WeWork was a crushed - margin job ( at best ) that suffered from a liberal mismatch between what it sold ( short - term leases ) and what it had bought ( long - term lease ) . The party was overlevered , overextend and ill managed during its efflorescence , and there simply was n’t enough time or space to pull it out of its nose dive .
Now we ’re simply counting down until the failure docs drop . Then we ’ll be able to stupefy a fork in what will in all probability stay the high-pitched - water mark of the last venture bonanza ’s silly season .
Unsurprisingly , real tech startups aredoing much better .
WeWork reportedly on the wand of filing for bankruptcy , store plumb
