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WeWork launches reverse stock split in NYSE survival bid

Co-working firm recently warned of “substantial doubt” over its future

WeWork Launching Reverse Stock Split to Stay on Exchange
WeWork interim CEO David Tolley (Getty, Linkedin, WeWork Companies Inc./Public domain/via Wikimedia Commons)

As doomsday approaches for WeWork, the company is pulling out all of the stops.

WeWork is set to launch a 1-for-40 reverse stock split on the New York Stock Exchange at the start of next month, Bloomberg reported. The company previously floated the strategy to keep the company stock on the NYSE, where a delisting has been hovering due to the company’s moribund stock price.

The move — common for companies trying to regain compliance on the exchange — consolidating every 40 shares of company into one share and is slated to go into effect at the end of day on Sept. 1. It will start trading on a post-split basis on Sept. 5.

Issues at the faded co-working giant have been plentiful in recent years, but stock struggles have been readily apparent. In premarket trading on Friday, shares dropped as low as 12 cents. Company stock has collapsed 99 percent since it went public in October 2021, eliminating $9 billion in market value.

WeWork this month acknowledged there was “substantial doubt” about whether it could keep operating due to a myriad of membership cancellations and a lack of cash. It told investors that the next year will either make or break the company, which needs to cut expenses, renegotiate leases, grow membership and raise capital.

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The company has lost $11.4 billion since 2020. Business operations alone have since cost WeWork $4 billion.

WeWork is also in the midst of a leadership change after CEO Sandeep Mathrani departed the company a few months ago. David Tolley is serving as chief executive officer on an interim basis, while the search for a permanent replacement continues.

All of this would’ve seemed unthinkable a few years ago, when WeWork soared under its charismatic founder, Adam Neumann. When it tried to go public initially, however, questions swirled around the business model and its founder’s activity activity, wiping away a $47 billion valuation and Neumann’s tenure with the company, which has been on rocky ground since.

WeWork has yet to turn a profit.

— Holden Walter-Warner

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CoworkingOffice MarketStock MarketWeWork