Flexible workspace provider WeWork plans to file for bankruptcy as early as next week, a source familiar with the matter said on Tuesday, in a stunning reversal of fortune for a company that was once privately valued at $47 billion.
Shares of the company fell 30% in extended trading after the Wall Street Journal first reported the news.
They have fallen roughly 96% this year.
New York-based WeWork is considering filing a Chapter 11 petition in New Jersey, the WSJ reported, citing people familiar with the matter.
WeWork did not immediately respond to a Reuters request for comment.
Earlier on Tuesday, the debt-laden firm decided to withhold interest payment of about $6.4 million.
The company has been in turmoil ever since its plans to go public in 2019 imploded following investors skepticism over its business model of taking long-term leases and renting them for the short term and on worries over its hefty losses.
WeWork’s woes did not abate in subsequent years.
It finally managed to go public in 2021 at a much-reduced valuation.
Its major backer, Japanese conglomerate SoftBank, sunk tens of billions to prop up the startup, but the company has continued to lose money.
WeWork raised “substantial doubt” about its ability to continue operations in August, with numerous top executives, including CEO Sandeep Mathrani, departing this year.
Co-founded by Adam Neumann, WeWork began operations in 2010 in New York, catering mainly to freelancers, startups and small businesses, but grew rapidly to include larger clients.
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