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WeWork Is on the Brink of Bankruptcy
WeWork was the front-runner and pioneer of co-working and shared office spaces as we know it today. The real estate company reached ‘unicorn’ status more than ten years ago in 2012 when then their valuation surpassed $1B.
Less than 5 years later WeWork was valued between $20 - $40B and the biggest funds and financiers on Wall Street were beating down their door for a piece of the action. Ultimately, Japan’s largest financial management firm - SoftBank - secured the lion share of any outside investment into the company when they piled $4.4B into founder Adam Neumann in 2017.
At the time, Masayoshi Son - SoftBank’s founder and CEO - believed in Neumann and his vision for where WeWork was headed next. However, Son would later call the massive investment ‘foolish’, and after taking a majority stake in the company, Son and SoftBank removed Neumann as CEO.
A few years later, things begin to go South for the New York born darling of ‘modern commercial real estate’.
First, WeWork’s IPO falls apart at the finish line line in 2019 amid fierce criticism of the company’s weak financials and leadership. Then, their valuation nose dives even further in 2020 when SoftBank rescinds a $3B offer to buy additional shares of the company.
Amidst much turbulence, WeWork finally goes public via SPAC in 2021; however, it’s been anything but clear skies ever since.
WeWork continues to struggle to turn a profit. In 2022 the company cleared $2.3B in losses, and they’ve surpassed $700M in losses just in the first half of this year.
With only $205 million in cash and $2.91B of debt, representatives at the company have now formally announced that they are exploring all relief options; including bankruptcy.
Quick Takeaways
In 2017 WeWork Was Valued At $40B
Today WeWork’s Stock Trades At Only $0.13 per Share
The Company Is Now On the Brink Of Bankruptcy
On Another Note
✺ They Accidentally Demolished His Home, Now They Want Him to Pay For It: What would you do if the city tore down your property by mistake, then sent you a bill to clean up the mess? Well this Atlanta resident, and now ‘former’ homeowner, is suing for exactly that. — WSB
✺ Skip the Apartments and Demolish the Office: Commercial-office-to-residential-apartment conversions have been all the rave, but this investor believes you’re better off tearing the building down and starting from scratch. — Bloomberg
✺ There’s A Dark Cloud Over the Sunshine State: South Florida’s housing market has been red hot since the height of the pandemic, but in the first half of ‘23 apartment occupancy rates have dropped 2%, and investment sales have tanked 72% YOY. — TRD
✺ Airbnb Bounces Back With $620M In Profit for Q2: Despite their ongoing struggle to reduce stubbornly high cleaning fees and other surcharges, Airbnb squeezed out an 11% year-over-year increase in bookings, and managed to push profits 70% higher than the previous quarter. — SF Gate
✺ The Fed May Finally Stall Rate Hikes: Last week the average interest rate for a 30-Year Fixed Mortgage climbed to nearly 7%; the highest it’s been since November ‘22. But with all eyes on the CPI (Consumer Price Index) we may finally see some relief if inflation continues to cool. — HW
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