WeWork’s shares plunged 37% in pre-market trading Wednesday, following news reports that the company plans to file for bankruptcy as early as next week.
The flexible workspace provider is considering filing for Chapter 11 bankruptcy protection in New Jersey, the Wall Street Journal and Reuters reported Tuesday, citing people familiar with the matter. A WeWork spokesperson told CNN the company would not comment on “speculation.”
Earlier on Tuesday, WeWork (WE) said it had agreed with creditors to extend a 30-day grace period to make interest payments on some of its debt that was due to expire this week. The new “forbearance agreement” will terminate in seven days, the company added.
WeWork was valued at $47 billion at its peak, but it has struggled to recover after a failed attempt to go public in 2019. At the time, IPO paperwork revealed larger-than-expected losses and potential conflicts of interest related to the company’s founder and then-CEO Adam Neumann.
The company eventually went public two years later at a valuation of about $9 billion, but it has continued to burn through cash and struggled to retain members, who pay to rent desks at WeWork’s office spaces.
In August, the company said “substantial doubt exists” about its ability to stay in business.
— CutC by cnn.com
