WeWork has revealed that it must edit its financial statements for three quarters, a floundering start for the newly public company.
According to the company, it had misclassified some of its public shares, which were previously referred to as permanent equity. However, they were meant to be classified as temporary equity.
As the company prepared its financial statements through September 30, WeWork reevaluated an accounting classification of Class A common stock that were issued as part of units sold in the IPO by BowX Acquisition Corp. This led the firm to find that the shares should not have been classified as “permanent equity.”
The coworking firm also said its management found “a material weakness in internal control over financial reporting relating to the interpretation and accounting” for a portion of its shares.
The news was announced in a filing with the Securities and Exchange Commission earlier this week and just around a month after the company went public.
WeWork has worked to remedy its reputation over the last several years, but this misstatement is a huge blunder in these efforts.