WeWork’s shares plunged 37% in pre-market trading Wednesday, following news reports that the beleaguered company plans to file for bankruptcy as early as next week as its losses mount.
The SoftBank-backed flexible workspace provider is considering filing for Chapter 11 bankruptcy protection in New Jersey, the Wall Street Journal and Reuters reported Tuesday, citing people familiar with the matter. A WeWork spokesperson told CNN the company would not comment on “speculation.” Earlier on Tuesday, WeWork said it had agreed with creditors to extend a 30-day grace period to make interest payments on some of its debt that was due to expire this week.
“Its major backer SoftBank must have reached a point where it can no longer justify bailing the business out.” WeWork’s shares have plunged 96% this year amid ongoing losses and a massive debt pile, which has become more costly to service as borrowing costs have risen on the back of interest rate hikes by central banks. The company’s demise has been years in the making, after it struggled to recover from a botched IPO in 2019.
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