New Delhi: WeWork, the company, which once upon a time was planning to launch its IPO, is now on the verge of bankruptcy. Shares of the company fell by close to 24 per cent in the stock market of New York.
Firms said that they needed additional capital, to keep the company on track over the next 12 years. The company backed by the Japanese SoftBank, is in pain due to hefty losses, corporate governance lapses and the management style of the founder and Chief Executive Officer Adam Neumann, reported Reuters.
As per reports, several executives have already left the company, with the CEO Sandeep Mathrani in May and just this very week, three board members walked out from the company.
“Our losses and negative cash flows from operating activities raise substantial doubt about our ability to continue as a going concern,” WeWork said in a filing with the SEC on Tuesday.
The company’s net loss has come down to $349 million in the second quarter of FY23 in comparison to $577 million a year ago, however, it still has burned $646 million in liquidity in the very first six months of the year.
At the end of June, the company had $205 million cash in hand, as per the Reuters report.
Japan-based conglomerate SoftBank is one of the biggest investors in WeWork. SoftBank has lost tens of billions to help the startup, still, the company continued to lose money.
