WeWork Aims to be Profitable in 2024

What’s going on:    

CEO of WeWork Sandeep Mathrani stated during an earnings call that WeWork now plans to be cash-flow positive in the second half of 2024, pushing back from the earlier projection of profitability by December, according to The Real Deal.  

This change in forecast comes from Marthrani after the company’s recent debt restructuring – which resulted in savings because of a reported $1 billion debt restructuring in March. 

Why it matters:       

WeWork’s delayed timeline for achieving profitability raises concerns among investors and analysts about the company’s financial health. Despite facing a daunting challenge in the first quarter, the company managed to cut its losses to $299 million – a considerable improvement from the staggering loss of nearly $500 million suffered just a year prior. 

Despite these slight financial improvements, WeWork’s shares have continued to struggle. The share price has at one point fallen to 39 cents and even sank to an all-time low of 38 cents. The low share price has caused the New York Stock Exchange to notify WeWork of the risk of being delisted due to the stock closing below $1 on average over a 30-day trading period. 

How it’ll impact the future:        

Many businesses are shifting towards flexible and remote working arrangements. WeWork’s is one of the largest shared workspace providers in the country, and its ability to achieve profitability may influence how investors feel about the coworking space industry at large, and the overall perception of the coworking sector as a solid business model. 

Reportedly, CEO Sandeep Mathrani has assured investors that the stock will not be delisted from the New York Stock Exchange. If the company does not raise its share price, its stock may become listed as a “penny stock” subject to restrictive regulations imposed by the SEC, according to The Real Deal.