The Wework Inc (NYSE: WE) stock price has fallen 91.35% since the year began, leaving many wondering whether this is the end for the co-working spaces company. Many have blamed the company for acting like a tech company instead of accepting that it was a real estate firm that needed to operate differently.
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The company's operating model was to sign long-term leases on prime office spaces in multiple countries across the globe. The company would then lease the same office spaces on a short-term basis to people who wanted an office but wanted to avoid the hassle of setting up their premises.
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Initially, the company witnessed some success and was able to attract about 520,000 customers by 2019. However, tenant numbers have been stuck at the same level for years as growth plateaued, yet the company was stuck with expensive long-term leases and was not growing anymore.
WeWork tried going public in 2019 but failed as investors balked at its massive losses and poorly-executed strategy amid the stagnant tenant number. Then, the COVID-19 pandemic hit in 2020, triggering an exodus of tenants as many people shifted to working from home.
The pandemic hit the company hard as many people working from its co-working spaces chose to work from home. Still, the company managed to survive and even went on to be listed as a public company in 2021, raising $1.3bn from investors.
WeWork recently warned investors that it could go out of business if it continues trading as it is. The company received a non-compliance notice from the NYSE in April regarding its share price, which had been trading below $1. The share price is still below $1, and WeWork plans a 1-for-40 reverse stock split.
The NYSE recently announced that it would be delisting WeWork warrants for trading at a low price, and the same could happen to its ordinary shares.
The firm reported that occupancy rates at its premises were around 75%, but it reported net losses of $2.3bn last year, after $4.6bn the year before. Given its current predicament, this could be the end for WeWork in its current form.
Wework stock price.
The WeWork stock has fallen 91.35% this year. Will the downtrend continue, and is this the end?
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