From being worth $47 billion to financial problems leading to bankruptcy, as expected for days. WeWork thus stars in one of the most meteoric trajectories of the latest startup boom.
In a statement, the company announced this Monday the decision to file for Chapter 11 of the United States bankruptcy law before a court in New Jersey. According to documents presented to the Court, the company, founded in 2010 by Israeli businessman Adam Neumann, has a debt that is between 10,000 and 50,000 million dollars.
WeWork detailed that it has already entered into a debt restructuring agreement with creditors that have more than 92% of its notes secured, which includes reducing its commercial lease portfolio, while focusing on “the continuity of its business,” according to the statement about his bankruptcy. “We remain committed to investing in our products, services and our team of employees,” said the company’s CEO David Tolley, in the letter.
The company, which offers shared work spaces, added that it hopes to continue its operations globally and clarified that the decision to file for bankruptcy law will not affect WeWork franchises outside the US and Canada. It is also present in Spain. Last August, when the company already admitted “substantial doubts” about its future, it did not foresee any closures in Barcelona and Madrid, with newly opened offices.
It has been a spectacular fall. It was more than a unicorn (in the world of finance the term unicorn designates emerging companies or start-ups valued at more than a billion dollars) and became an icon of ‘coworking’ or coworking: shared work spaces.
After going public in October 2021, its shares stood at almost $600 per share. According to The New York Times, the impact of its possible bankruptcy would be devastating for building owners in cities like New York or London, many of whom have already agreed to reduce the money they charge the company to keep it afloat, and for that the pandemic and the increase in teleworking have been a hard blow.
The financial problems of the company, which was valued at $47 billion in 2019 after an injection of private capital from firms such as Softbank or Goldman Sachs, began as a result of the coronavirus pandemic, when the remote work model It began to become popular in the US.
