WeWork Inc. (NYSE: WE), the office-sharing company, was one of the most valuable private companies in the world four years ago. It rented too much space to rent to its customers. Its value plunged. The COVID-19 pandemic finished off the job. Now, WeWork wants to refinance its debt, which will not save it. (Click here for the states where AI will put the most people out of work.)
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A restructuring of $3 billion of debt may buy WeWork some time. The New York Times says talks about doing so are underway, but the transaction may not close. If it does not, WeWork’s end game has begun. As part of the deal, WeWork would shutter 300 locations. Add that to the hundreds it already has closed.

Its latest earnings report bolstered the signs of WeWork’s ongoing trouble. In the most recent three months, revenue rose to $844 million from $718 million. It was crushed on the bottom line as it lost $527 million.

Sandeep Mathrani, CEO and board chair, put on a brave face, which did not matter. “Our fourth quarter results demonstrate that we accomplished what we set out to do in fiscal year 2022 by staying focused on reducing expenses, optimizing our portfolio, growing revenue, and increasing occupancy.”

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WeWork’s stock has been battered, making it a penny stock (one that trades below $5). Its share price of $1.18 is down from $7.54 in June of last year.

WeWork has a number of problems. One is that it paid too much for its leases. Another is that it has a large number of competitors. Even if these have fewer offices, they compete effectively with WeWork in individual cities.

WeWork is still too expensive to run. That is the problem that will wreck it.

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