WeWork Is in Big Trouble

By Douglas A. McIntyre Published Mar 9, 7:30AM EST

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WeWork Is in Big Trouble — © Tomwang112 / iStock via Getty Images

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.
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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.
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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.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.