(Bloomberg) — WeWork Inc., the troubled co-working company on the brink of collapse, is taking drastic measures to save its listing on the New York Stock Exchange. In a last-ditch effort, WeWork has announced a 1-for-40 reverse stock split, but the move hasn’t been able to stop its shares from plummeting to a record low of around 12 cents. This latest development highlights the stark reality that WeWork is facing as it struggles to transform into a profitable public company and regain investor confidence.
Since going public in October 2021, WeWork’s stock has experienced a freefall, losing a staggering 99% of its value and wiping out $9 billion in market capitalization. The reverse stock split, which will go into effect on September 1, is an attempt to meet the New York Stock Exchange’s listing requirements, which mandate a minimum closing price of $1 per share. However, it remains to be seen whether this move will be enough to reverse WeWork’s fortunes and restore faith in the company’s viability.
WeWork Implements Reverse Stock Split in Effort to Save Listing
WeWork Inc., the troubled co-working company, is taking drastic measures to save its listing on the New York Stock Exchange. The company has announced a 1-for-40 reverse stock split, a move that aims to increase the stock price and regain compliance with listing requirements. However, shares plunged as much as 25% on Friday, reaching a record low of around 12 cents.
WeWork has been struggling to turn its business around for years, as it continues to face financial difficulties and a decline in customer memberships. The company has been bleeding cash, which prompted a warning on August 8th that it may not be able to stay afloat. Since going public in October 2021, WeWork’s stock has plummeted 99%, wiping out $9 billion in market value.
The reverse stock split is set to take effect on September 1st, with trading on a post-split basis beginning on September 5th. While the split is intended to meet listing requirements, WeWork stated that it is not expected to impact its operations. The New York Stock Exchange requires a minimum closing price of $1 per share, making reverse splits a common practice for penny stocks seeking to maintain their listings.
The decline of WeWork has been rapid and significant. In 2019, the company was the largest private occupier of office space in Manhattan and London, with a valuation of $47 billion. However, a failed attempt at an IPO led to the ousting of co-founder Adam Neumann as CEO and a financial rescue from major backer SoftBank Group Corp. The Covid-19 pandemic further compounded the company’s challenges, as its office locations emptied out and occupancy levels have struggled to recover.
In conclusion, WeWork’s implementation of a reverse stock split is a last-ditch effort to save its listing on the New York Stock Exchange. The company’s stock has plummeted since going public, and it continues to face financial difficulties and declining customer memberships. The reverse split is aimed at meeting listing requirements, but the company’s future remains uncertain as it tries to navigate a challenging market and regain profitability.
