WeWork Bankruptcy Risk Grows As Share Price Tanks

3 min readAug 22, 2023

Key takeaways

WeWork is on the brink of bankruptcy after suffering huge losses this and last year
The company’s shares could be delisted from the NYSE
WeWork’s collapses poses a risk to New York City’s struggling commercial real estate market

Alarms around WeWork flatlining keep ringing. The company’s shares have plummeted in value, and it looks as if WeWork could collapse into bankruptcy — which poses a problem for New York City, where WeWork holds dozens of commercial property leases. Let’s get into it.

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What’s happening with WeWork?

Earlier this month during its earnings call, WeWork warned that there was “substantial doubt” about its “ability to continue as a going concern” — also known as, “we’re outta money”.

Founded back in 2010, the company promised to revolutionize the workspace and provide flexible offices for small businesses and entrepreneurs. The business suffered a spectacular fall from grace before its IPO — when WeWork had been valued as high as $47 billion — after its founder Adam Neumann’s erratic behavior and wild spending were revealed.

It’s been a downward spiral since Neumann was ousted in 2019, with the company now worth just $474 million. WeWork suffered a $700 million loss in the first half of this year, fueling the fires that the company could collapse.

Despite everything, the company is still regularly used by subscribers. WeWork currently has 777 locations across 39 countries, with 653,000 physical memberships.

Could WeWork shares halt trading?

WeWork shares have lost 90% of their value since the start of this year, having formerly peaked at just over $13 in 2021. Given WeWork shares are trading at just 13 cents, it’s possible the company could be delisted from the New York Stock Exchange.

But WeWork’s potential collapse poses another problem. The company was the biggest commercial leaseholder in London and New York in 2019. It still has over 70 leases active in the latter, which would then come back onto the market at a time when commercial property is already struggling after Covid.

The result? Even more stress on major cities’ real estate markets, hitting landlords and tenants. New York is looking to cut red tape around converting empty office blocks into homes, but it’s not happening fast enough — residential rents have increased 25% in the city since the pandemic.

The bottom line

Should WeWork go bankrupt, there’s the knock-on effect of potential contributing to worsening major cities like London and New York’s commercial real estate issues, which have failed to rebound in the work-from-home era. Unless a big bailout or cash injection is on the way, WeWork should brace for impact.

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