I wish there was a way someone could have predicted this?!?! Oh yea, EVERYONE saw it coming. The rumors were true; WeWork has filed for bankruptcy. Their stock was halted the other day, and it was just a matter of time before they filed the official paperwork.
We wrote in our Friday, November 3 issue about how bad things had gotten for WeWork with debt of $2.9 billion as of June end and more than $13 billion in long-term leases” against $844 million in revenue for their June 2023 quarter with a loss of $397 million.
So what happens next? Well, it’s not the end of WeWork. At its core I think the concept behind WeWork, that is co-working spaces, is a great idea (I would say that, seeing as how I started a co-working space in Saratoga Springs, NY in 2016, but that’s a whole other story). I think the problem with WeWork was they expended too fast, and the business economics never made financial sense. Then Covid didn’t help things, and now we’re facing a Commercial Real Estate nightmare with cities like NYC, LA, and SF getting clobbered as more companies embrace fully distributed teams. So next I’m guessing they’ll go through Chapter 11, reorganize, shed most of their debt, and then if I had to guess they’ll get bought out. By who, well that’s for another video.
America loves a good underdog story, so I doubt this is the last we’ll hear of WeWork.
WeWork files for bankruptcy: How the company tumbled after a valuation of $47B in 2019