WeWork says it has 'substantial doubt' about its ability to stay in business | CNN Business

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“Substantial doubt exists” about WeWork’s ability to continue to stay in business, due to the company’s losses, projected cash needs and increased member turnover, according to the company’s second quarter earnings release.

The future of WeWork is uncertain, according to the company. WeWork management outlined a plan to improve the company’s financial health, saying that its ability to stay in business is “contingent upon successful execution” over the next 12 months. WeWork, which operates coworking spaces, said it will try to lower rent costs by negotiating more favorable lease terms and increasing revenue by reducing canceled memberships as part of its turnaround plan.

Overall, WeWork’s stock is down 85% since the start of this year. WeWork’s precarious future comes amid a difficult time for the commercial real estate sector. Office and retail property valuations have plummeted since the pandemic made way for a rise in hybrid working. Rising interest rates have also damaged the credit-dependent industry. WeWork was valued at $47 billion at its peak, but it struggled to fully recover after a failed attempt to go public in 2019.

 

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