WeWork aims to comply with listing rules through 1-for-40 reverse stock split.

WeWork to Proceed with Reverse Stock⁤ Split

By ‌Shivansh Tiwary⁤ and Kannaki Deka

WeWork announced on Friday that ⁢it will proceed with a‍ one-for-forty reverse stock split in order to regain compliance with listing ‌requirements. This comes just days after ⁣the flexible workspace provider ‌raised​ “substantial doubt” over its ability to continue operations.

The company’s shares have lost ‌nearly all of their value since making their market debut through a blank-check merger in October 2021. They were last down 23.6% ⁤at 12 cents on‌ Friday.

WeWork, once privately valued at $47 billion,⁢ now has a market capitalization of about $336 million,⁣ marking ⁢a​ stunning reversal of fortune.

The SoftBank-backed company has faced turmoil since its​ failed attempt ​to go public in 2019. Investors grew ​concerned ​about its ‍hefty losses and⁣ began​ to doubt‍ its business model of taking long-term leases and renting them ⁣for the short term.

WeWork reported a 3% ⁣drop in total physical memberships from a year earlier, citing increasing competition, macroeconomic volatility, and softer demand than anticipated.

Meanwhile, the ⁢company has taken several steps to save ⁣cash, including exiting locations, cutting jobs, and reducing debt by​ about $1.5⁤ billion.

In May, CEO Sandeep⁣ Mathrani⁤ resigned, followed by the exit of CFO Andre Fernandez.

WeWork received a‍ non-compliance notice from the New York Stock Exchange in April and had six months to regain‌ compliance.

The reverse stock split, which consolidates the ⁤number of ⁤existing shares ‍into fewer shares, will help the​ company regain compliance with the minimum closing price required for ‌continued‍ listing.

“It could⁣ suggest that they⁣ are ⁤still figuring out or exploring ways to raise more capital,” said​ Mizuho Securities analyst Vikram Malhotra.

The reverse stock split, authorized ​by shareholders in June, will be effective at market close on Sept. ⁤1, according⁤ to the company.

(Reporting ‌by Shivansh Tiwary‌ and Kannaki Deka in Bengaluru, additional reporting by Pratyush Thakur; Editing by Krishna Chandra Eluri and Sriraj Kalluvila)

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