© Reuters
Investing.com — Shares in WeWork (NYSE:) shed more than a fifth of their value in premarket U.S. trading on Wednesday after the office space provider warned that there is “substantial” doubt around its ability to continue as a going concern.
WeWork, which was once valued by SoftBank at $47 billion, flagged that its management team must now raise additional funds in order to keep the company afloat and secure liquidity over the next twelve months.
Interim Chief Executive Officer David Tolley, who took over from former boss Sandeep Mathrani in May, noted that there has been a “steep decline” in memberships due in part to excess commercial real estate supply and broader economic volatility.
The company previously signed deals earlier this year to slash debt by around $1.5B and extend the date of some maturities. WeWork had argued that the moves would help it retain cash and keep the firm in business.
But its troubles have deepened this year, highlighted by the resignations of Mathrani and Chief Financial Officer Andre Fernandez. WeWork said on Tuesday it is also looking to add four new board members after three stepped down.
Meanwhile, adjusted losses before interest, tax, depreciation, and amortization came in at $36 million in the second quarter, missing estimates it had provided to analysts.
Shares in WeWork have now fallen by over 95% in the past one-year period.
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