Jakarta, CNBC Indonesia – WeWork filed for bankruptcy in November 2023. The US-based co-working startup announced bankruptcy after reporting losses in the third quarter of 2023.
WeWork’s bankruptcy could be considered ironic. The reason is, this startup company was once one of the most valuable startups in the world.
Founded by Adam Neumann and Miguel McKelvey in 2010, WeWork experienced a tumultuous path to becoming a public company.
The chronology of WeWork’s bankruptcy dates back to mid-2019. In August 2019, WeWork filed for an initial public offering (IPO) and published a detailed financial report showing a loss of nearly US$700 million in the first half of the year.
In September of the same year, the world’s former largest unicorn startup said it planned to go ahead with an investor roadshow for its IPO, despite concerns over the valuation that could be achieved in a share listing.
It said it plans to list its shares on the Nasdaq and announced changes to its corporate governance, including restrictions on CEO Adam Neumann’s voting rights.
Later, Neumann agreed to resign his position, bowing to pressure from some investors.
They then submitted an IPO withdrawal because the potential valuation would fall to US$10 billion, from US$47 billion in January 2019.
In November 2019, WeWork said it would lay off around 2,400 employees worldwide, as it sought to cut costs and stabilize its business.
February 2020, they appointed real estate industry veteran Sandeep Mathrani as their new CEO.
A year later, in March 2021 to be precise, the company said it had lost US$3.2 billion in 2020. This was conveyed in front of potential investors.
At that time, WeWork agreed to go public through a merger with blank check company BowX Acquisition Corp. Long story short, in October 2021 WeWork successfully went public through a SPAC deal.
In May 2022, the company appointed Andre Fernandez as CFO, replacing Benjamin Dunham. Then in late 2022, it said it would exit about 40 underperforming U.S. locations.
In early 2023, the company again carried out layoffs by cutting around 300 employees globally as part of an effort to reduce underperforming outlets.
In March 2023, they reached an agreement to cut debt by about US$1.5 billion and extend certain maturity dates, in an effort to conserve cash as the company carried out mass layoffs.
Going into April 2023, the company received a notice of noncompliance from the New York Stock Exchange, as its shares closed below $1 on average over a period of 30 consecutive trading days.
In May 2023, it said CEO Sandeep Mathrani would resign with effect on May 26.
In the same month. Andre Fernandez as CFO also stated that he would resign on June 1, with less than a year in office.
In August 2023, WeWork raised “substantial” doubts about its ability to continue as a going concern, and said three board members had resigned.
Then in early November this year, they finally declared bankruptcy because they were in debt and suffered large losses.
Reported Reuters a number of people familiar with the matter say WeWork is considering filing a Chapter 11 petition in New Jersey.
The company had long-term net debt of US$2.9 billion at the end of June and long-term leases of more than US$13 billion. WeWork owns this amount amidst rising banking loan costs which are hurting the commercial real estate sector in the United States.
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