WeWork, the struggling and dying co-working company, is moving ahead with a 40-for-1 reverse stock split to preserve its listing on the New York Stock Exchange.
Shares hit their lowest intraday level on record on Friday, closing at 14 cents, down 11%.
For years, WeWork has struggled to create a turnaround story — the transformation of a boisterous co-working startup into a stable, profitable public company. But the New York-based company has been bleeding cash as customers of its office leases cancel memberships, forcing the company to warn on Aug. 8 that it may not be able to stay afloat.
Since its listing in October 2021, WeWork’s stock price has plummeted 99%, wiping $9 billion off its market value.
WeWork said in a statement on Friday that the reverse stock split will take effect at 4:01 p.m. New York time on Sept. 1, with post-split trading beginning at the open on Sept. 5. In a statement, the company said the spin-off will bring it back into compliance with listing requirements and is not expected to affect operations.
The NYSE requires a minimum closing price of $1 per share, and the reverse split is standard practice for penny stocks seeking to stay listed.
The speed of WeWork’s decline has been astounding. In 2019, WeWork was the largest occupier of private office space in Manhattan and London, operating millions of square feet of office space in dozens of countries, and was valued at $47 billion, making it the most valuable start-up in the US one.
Its rise has been fueled by venture capitalists spending billions of dollars renting out real estate around the world and renting it back to workers. Co-founder Adam Neumann led a disastrous IPO attempt in 2019 that led to his ouster as CEO and a need for a financial bailout from his main backer, SoftBank Group Corp.
The Covid-19 pandemic has dealt another blow. WeWork locations sat empty in the early months of the health emergency, but progress was slow to fill vacancies last year. But so far, the recovery appears unsustainable. WeWork said this month that occupancy rates fell in the second quarter compared with the previous quarter.
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