WeWork announced that it plans to move forward with a 1-for-40 reverse stock split to remain traded on the New York Stock Exchange, the coworking company announced Friday. The move — which will turn every 40 shares held by an investor into a single one — will help boost the beleaguered coworking company’s stock value after the NYSE warned WeWork in April it could be delisted since its shares fell below $1 for more than a month. WeWork’s shares dropped nearly 13 percent from Thursday’s closing price and were at 13 cents a share Friday morning.
Coworking giant WeWork has been no stranger to doom-and-gloom headlines since its very public near implosion in 2019, and this week has been no exception. The fallout from the last couple of days could not just decide the fate of the company’s stakeholders and thousands of employees, but also the immediate health of an already ailing office market where WeWork leases millions of square feet. On Tuesday, WeWork said it has “substantial doubt” about its ability to stay afloat as part of its second-quarter earnings call that revealed it continued to lose money and members.
The flexible workspace provider is running out of options and cash. The company’s second-quarter results suggests the next 12 months will every bit as fraught as WeWork’s near implosion four years ago. Absent effective remedial action or another capital raise, it could be lights out