US: WeWork has issued a warning to investors that it may not be able to continue as a viable business.
The company’s Q2 2023 earnings report released last week said: “As a result of the Company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern.”
WeWork saw revenues of US$844 million in Q2, an increase of four per cent year-over-year, but a net loss of nearly US$400 million, compared to US$635 million in the second quarter of 2022.
In a statement addressing the most recent financial performance, WeWork interim CEO David Tolley said: “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships.”
After the release of the Q2 report, WeWork’s stock value fell by about 40 per cent to $0.13 per share. It has since recovered to $0.22. WeWork went public in October 2021 — the same month the company recorded its highest-ever stock price of more than $13 per share.
As of June 30, 2023, the company has a worldwide real estate portfolio of 777 locations across 39 countries, which supports around 906,000 workstations and 653,000 physical memberships, equating to physical occupancy of 72 per cent. Its average revenue per physical member was US$502 in the second quarter of 2023.
The latest news follows the issuing of a delisting notice to the company by the New York Stock Exchange back in May of this year.
