WeWork: endgame for the coworking giant?

Samir Rahmoune

November 2, 2023 at 2:49 p.m.


WeWork © Linda Parton / Shutterstock.com

© Linda Parton / Shutterstock.com

The coworking specialist WeWork may soon have to file for bankruptcy.

With the explosion of independent work and the emergence of digital nomads, a new category of professional premises has been created: coworking spaces. An evolution that seemed inevitable, but which is nevertheless beginning to experience limits. The proof is with the American sector giant WeWork, based in New York, which is facing large-scale financial problems. To the point of seeing one’s future mortgaged?

Towards bankruptcy?

WeWork is doing badly if we are to believe information from the Wall Street Journal. The across-the-Atlantic newspaper announces that the company could well seek protection by next week under the famous article 11 of the American bankruptcy law, which allows the protection of a company undergoing serious difficulties.

It must be said that the group’s financial results are catastrophic, including a 96% drop in its stock price this year. The information of Wall Street Journal has only accentuated this decline, with a price which has fallen by 32% since the publication of the article.

wework-coeur-marais.png © WeWork

A WeWork space in the Marais, Paris © WeWork

WeWork is in debt

WeWork, for its part, indicated this week that it had reached an agreement with its creditors, allowing in particular to extend the deadline for a certain number of payments. Not necessarily reassuring investors given the figures displayed in the company’s accounts.

Because last June the group was saddled with long-term debt of $2.9 billion. In terms of its premises, all of the long-term leases contracted by WeWork represent a cost of $13 billion. In recent years, the main investor, Japanese telecommunications giant Softbank, has spent tens of billions in the group to support its development and keep the house standing. A support that would come to an end?

Source : Reuters

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