WeWork’s stock is on the clock.
The co-working giant received a non-compliance notice from the New York Stock Exchange, Reuters reported, after its stock closed below $1 on average over a 30-day trading period.
The notice doesn’t mean immediate consequences, as the beleaguered company said it should have six months to regain compliance before being delisted from the exchange.
It won’t be easy for WeWork to recover, though. In aftermarket trading following WeWork’s disclosure on Tuesday, company stock dropped another 2 percent to a meager 48 cents. Shares have dropped 65 percent year-to-date and its market capitalization as of late Tuesday was $361 million, a far cry from its $47 billion valuation in 2019.
Short sellers piled onto the co-working firm last year after it failed to turn a profit in its first full year as a publicly traded company. As of Dec. 15, investors held short positions on more than 27 percent of WeWork’s publicly tradable shares.
The company has been burning through cash and looking for solutions. Last month, it closed in on a deal to restructure more than $3 billion in outstanding debt and raise additional cash, perhaps enough to keep the company afloat for several years.
In January, SoftBank — WeWork’s largest investor and creditor — lent the company $250 million; a month later, it increased the size of a debt facility and postponed a repayment deadline. SoftBank has poured $10 billion into WeWork since 2017.
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WeWork burned through $700 million in cash last year, closing 2022 with $287 million in pocket. At the end of 2021, the company had $924 million at its disposal. The company cut 300 positions at the start of the year.
In a letter sent to shareholders last month, CEO Sandeep Mathrani said this was “WeWork’s moment,” buoyed by increased membership and occupancy. The company had 682,000 memberships at the end of last year, the most in its history.
— Holden Walter-Warner