After failing to meet the deadline of turning a profit during its first year as a public company, WeWork is becoming home to short sellers.
Short sellers refer to investors who borrow securities, sell it on the market and eventually buy it back for a lower price, an effort to profit from a stock’s losses.
Shorts that make up more than 10% of a firm’s shares suggest a relatively pessimistic view of the economy. For WeWork, investors held short positions on over 27% of the company’s shares as of December 15 — a grim sign for the coworking firm.
WeWork went public in October of 2021, and has since continued to burn through cash. While the company has made attempts to right-size its business by closing underperforming locations, investors are skeptical of the operator’s profit timeline.
“Right now all [investors] see is WeWork promised three times to hit its break-even goal and push that out,” said Vikram Malhotra, an analyst at Mizuho.
Although its reputation has somewhat been mended since going public, experts have expressed concern over whether WeWork can weather the worsening economy.
