WeWork Inc (NYSE:WE) shares have plunged to a record low on reports the flexible workspace provider plans to file for bankruptcy as soon as next week.
Its shares plunged by 53% to US$1.07 on Wednesday morning.
Privately valued at $47 billion in 2019, the company’s market capitalization is now about $120.3 million.
New York-based WeWork intends to file for Chapter 11 bankruptcy protection in New Jersey, the Wall Street Journal first reported on Tuesday evening, citing people familiar with the matter.
In response to the report, a WeWork spokesperson told the media: “We do not comment on speculation.”
Softbank-backed WeWork has faced numerous hurdles since its failed initial public offering (IPO) in 2019, including ongoing losses and significant debt.
Concerns over the viability of its business model of taking on long-term leases to offer short-term office rentals were exacerbated during the pandemic when remote working saw demand for office space rentals decline.
It went public at a valuation of about $9 billion in 2021 but has since continued to burn through its cash as it struggles to attract members to rent its office spaces.
It had warned in August that it was facing bankruptcy, stating “substantial doubt exists” about its ability to continue its operations.
WeWork’s stock is down 98% in the year-to-date.
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