WeWork Moves Forward With 1-for-40 Reverse Stock Split in Effort to Stay on NYSE
By Nicholas Rizzi August 18, 2023 12:09 pm
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WeWork plans to move forward with a 1-for-40 reverse stock split to remain traded on the New York Stock Exchange, the coworking company announced Friday.
The move — which will turn every 40 shares held by an investor into a single one — will help boost the beleaguered coworking company’s stock value after the NYSE warned WeWork in April it could be delisted since its shares fell below $1 for more than a month.
WeWork’s shares dropped nearly 13 percent from Thursday’s closing price and were at 13 cents a share Friday morning.
The announcement of the reverse stock split came a week after the coworking company told investors that it had “substantial doubt” about its ability to stay afloat as it continued to lose money and members.
While WeWork projected confidence in a plan to improve its balance sheet, the coworking company has been struggling since its headline-grabbing, failed initial public offering attempt in 2019 that eventually led to the ouster of its co-founder and CEO Adam Neumann and a takeover by investor SoftBank Group. Its eye-popping $47 billion valuation was cut to its current $281 million market capitalization.
Neumann was replaced by Sandeep Mathrani who worked to cut the company’s huge overheard — in part by renogationing or canceling leases — and was able to take it public in 2021 through a merger with a special purpose acquisition company. And while the company has slashed more than $2.3 billion in costs and $12.7 billion in future lease payments, it still posted $397 million in losses last quarter and saw a 1 percent decrease in membership year-over-year.
Mathrani left his post in May to join a private equity firm and, less than two weeks later, Chief Financial Officer Andre Fernandez resigned. David Tolley, the former CEO of satellite communications provider Intelsat S.A., was named interim CEO of WeWork after Mathrani’s departure.
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
