WeWork On Sale For 10 Cents


WeWork’s Stock sells for just above 10 cents and will likely fall below that soon. Operating near bankruptcy, it will try to do a reverse split to get the stock above $1 to stay on the New York Stock Exchange; the move will not matter.

The proposed 1 for 40 reverse split does not change WeWork’s market cap. The move seems so desperate that it pushed the stock down. A company once worth $40 billion is now worth $111 million, and that figure is too high.

Almost two weeks ago, WeWork announced “substantial doubt” about whether it can stay in business. A buyer could keep the company intact in a bankruptcy filing but make it much smaller. If that does not happen, it could be liquidated, which means it would disappear entirely.

Last quarter, WeWork lost $397 million. That was better than the $635 million in the same quarter a year ago. But, quarter after quarter, it has eaten away at its small amount of cash. WeWork only had $205 million in the bank at the end of the quarter, plus a modest borrowing facility.

WeWork remains a space-sharing behemoth. It has over 700 locations in 39 countries. It has 682,000 people or companies that operate in those locations. Even at that remarkable size, its financial weakness cannot salvage what appears to be a success, at least on paper.

The office-sharing business is decades old. WeWork gave the industry scale. And scale is what destroyed it. Being overextended has been the death of countless companies.

Also check out: America’s most hated companies.

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