The American giant, star of shared offices, sees its shares plummet on the stock market, on Wall Street. The company faces heavy debt, its offices could soon close.
It all started with an article in the Wall Street Journal at the beginning of the week announcing the company was on the verge of bankruptcy. It was enough for investors to become frightened and cause the stock to plummet on the stock market. In 24 hours the share value was halved. The shared office specialist has been in bad shape for several months. Its debt is close to three billion dollars. WeWork manages more than 700 sites around the world, spread across around forty countries, including France. The offices could therefore soon close.
WeWork’s concept in 2010 was simple: rent office space on a long-term basis, with leases over several years, up to 15 years. To then offer them, much more expensively, for short-term rental, in the form of workstations, meeting rooms rented by the day or week. In the years 2010-2019, at a time when real estate prices were reaching peaks, when companies were extolling the merits of flex office, many companies found the idea attractive. This saved them from purchasing square meters at high prices in the center of capitals for their executives.
After the success story, the collapse
Not to mention that WeWork also targeted self-employed workers and the unemployed, betting on the fact that they prefer to rent an office for a few hours rather than spending their day at the café or the local Starbucks. WeWork convinces, raises billions of dollars, notably from Soft Bank, is valued at almost 50 billion dollars and ends up going public.
The management of its creator, Adam Neumann, – a young CEO perceived as an uncontrollable prodigy – is singled out. He must also leave. But, above all, in 2020, with covid, it’s a cold shower. The pandemic is seeing teleworking develop and even become established. WeWork then loses its appeal and continues to lose money.
The problem is that with interest rates soaring, its debt is costing it more and more. WeWork is trying to renegotiate its deadlines with its creditors but that is not enough. It doesn’t take much for WeWork to be on the brink of the abyss today, not very far from the end!