WeWork is on the brink of filing for Chapter 11 bankruptcy protection, which could happen as early as next week.
Following the Tuesday afternoon reports, WeWork’s shares plummeted by 37% in pre-market trading, according to CNN Business. During regular trading stock market hours this percentage reached over 40%. This development marks another drastic downturn for a company that was once valued at $47 billion in 2019.
WeWork’s financial troubles have been mounting, with the company’s shares dropping 96% this year amid ongoing losses and a vastly growing debt pile. The cost of servicing this debt has increased due to rising interest rates, putting additional strain on the company’s finances. On Tuesday, the company stated that it had made an agreement with creditors to extend a 30-day grace period to make payments on some of its debt.
WeWork has experienced multiple leadership switch-ups this year, a 1-for-40 reverse stock split, and mounting lawsuits. The company’s struggles can be traced back to a failed IPO attempt in 2019 — which revealed larger-than-expected losses. Despite eventually going public two years later at a reduced valuation of about $9 billion, the company has continued to face financial difficulties ever since.