WeWork is a platform for creators that transforms buildings into dynamic environments for creativity, focus, and collaboration.
WeWork Inc. is a provider of coworking spaces, including physical and virtual shared spaces, headquartered in New York City. As of December 31, 2022, the company operated 43.9 million square feet (4,080,000 m2) of space, including 18.3 million square feet (1,700,000 m2) in the United States and Canada, in 779 locations in 39 countries, and had 547,000 members, with a weighted average commitment term of 19 months.
In 2019 the initial public offering (IPO) of its then-parent company, The We Company failed. The Wall Street Journal noted that, on the release of its public prospectus in August 2019, the company was “besieged with criticism over its governance, business model, and ability to turn a profit”.
The We Company filed its Form S-1 for the IPO in August 2019. The following month, facing mounting pressure from investors based on disclosures in the S-1, company co-founder Adam Neumann resigned from his position as CEO and gave up majority voting control. Amid growing investor concerns over its corporate governance, valuation, and outlook for the business, the company formally withdrew its S-1 filing and announced the postponing of its IPO. At that time, the reported public valuation of the company was around US$10 billion, a reduction from the $47 billion valuation it had achieved in January and less than the $12.8 billion it had raised since 2010. As of August 2023, the company had a market capitalization of $326 million.
In October 2019, Neumann received close to US$1.7 billion from stakeholder SoftBank for stepping down from WeWork’s board and severing most of his ties to the company. He was retained as a consultant with an annual salary of $46 million.
The New York Times described the company’s failed effort to go public, and its related turmoil, as “an implosion unlike any other in the history of start-ups”, which it attributed to Neumann’s questionable tenure and the easy money previously provided to him by SoftBank, led by Masayoshi Son. In August 2023 WeWork warned that it had ‘substantial doubt’ that it could stay in business, and might file for Chapter 11 bankruptcy protection. On October 31, 2023, reports circulated that WeWork would be filing for bankruptcy “imminently”, which resulted in a 37% dip in share value.
Shared workspaces and related services.
According to a shareholder letter, Arm is well positioned to benefit from the AI boom, and is offering its services to big players.
WeWork has filed to begin bankruptcy proceedings to protect itself as it reorganizes debt in US and Canada only.
After all the challenges WeWork has faced, the news about its going bankrupt does not seem surprising. The company did not comment on the announcement yet.