WeWork, which SoftBank invested a large sum of money into, is reportedly planning to file for bankruptcy within a week
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WeWork, a major American co-working space company that has achieved rapid growth thanks to Softbank's large investment, but has since plummeted and its business continuity is in doubt, is planning to file for bankruptcy in early November 2023 at the earliest. This was reported by the daily economic newspaper/Wall Street Journal.
WeWork Plans to File for Bankruptcy as Early as Next Week - WSJ
https://www.wsj.com/articles/wework-plans-to-file-for-bankruptcy-as-early-as-next-week-1fdcb6a5
WeWork Plans to File for Bankruptcy, WSJ Reports - Bloomberg
https://www.bloomberg.com/news/articles/2023-10-31/wework-plans-to-file-for-bankruptcy-wsj-reports
WeWork plans to file for bankruptcy as early as next week, source says | Reuters
https://www.reuters.com/markets/deals/wework-plans-file-bankruptcy-early-next-week-wsj-2023-10-31/
WeWork reportedly on the verge of filing for bankruptcy, stock plummets | TechCrunch
https://techcrunch.com/2023/10/31/wework-reportedly-on-the-verge-of-filing-bankruptcy-stock-plummets/
The Wall Street Journal reported on October 31, 2023 that WeWork is considering filing for Chapter 11 bankruptcy protection in New Jersey. The Federal Bankruptcy Act is a law equivalent to Japan's Civil Rehabilitation Act, and since Article 11 stipulates typical bankruptcy procedures, the application procedure based on this provision is also called 'Chapter 11.' Masu.
WeWork reported in a filing on October 31 that it is in discussions with creditors to take steps to 'improve its balance sheet' and 'rationalize its real estate footprint.' In addition, on October 30, the day before that, it was reported that the company had entered into a grace agreement with its creditors to extend the October interest payment, which had been extended by one month, for an additional seven days.
A WeWork spokesperson said the company 'refers to comment on speculation' about its bankruptcy filing, but added that the agreement to defer payment means the company 'continues to have positive dialogue with key financial stakeholders and is improving its capital structure.' This will give us time to implement ongoing strategic initiatives to strengthen our business.' The spokesperson also emphasized that WeWork has a 'clear long-term vision for the future.'
WeWork's bankruptcy filing is a stunning reversal of fortune for a company once valued at $47 billion (approximately 7 trillion yen) and Softbank, which invested billions of dollars (hundreds of billions of yen). Reuters said it was a stain on the company.
WeWork was aiming to list its stock in 2019 with the support of SoftBank Group, but concerns about its business model and huge losses surfaced and the initial public offering (IPO) failed . WeWork was subsequently able to go public in 2021 at a valuation that was significantly lower than the initial one, but it continued to make losses since then.
This situation has been exacerbated by COVID-19, which has prompted companies to shift to remote work and abandon office space. Although some companies have returned to the office as the pandemic subsides, office demand has not recovered to pre-pandemic levels and they admit that business continuity is in serious doubt in August 2023.
WeWork, a co-working space in which SoftBank has invested heavily, warns of possible bankruptcy, admits there are ``serious doubts about its ability to continue'' - GIGAZINE
by Phillip Pessar
WeWork also has ventures into WeGrow, a private elementary school, WeLive, a residential building, and Rise By We, a fitness center.
A user on the social news site Hacker News who uses WeWork said, ``I'm currently sitting in a WeWork office and I love it, but often the entire floor is rented out.Many of the bases are ghost towns. In some places, entire floors are closed.'
A forum related to this article has been set up on the GIGAZINE official Discord server. Anyone can write freely, so please feel free to comment!
• Discord | 'Have you used WeWork's workspace? How did it feel?' | GIGAZINE
https://discord.com/channels/1037961069903216680/1169204760201662544
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