WeWork Appoints David Tolley to Permanent CEO
By Mark Hallum October 16, 2023 11:27 am
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A new CEO will take a run at guiding WeWork (WE) through its seemingly never-ending distress.
The coworking firm announced Monday morning that interim CEO David Tolley will be the permanent replacement for Sandeep Mathrani, who left at the end of May.
Since taking over as interim, Tolley has implemented many cost-saving measures for the company, including announcing that WeWork would renegotiate nearly all of its office leases — with plans to reduce its rent at some sites and shuttering others — which resulted in a 9 percent increase in WeWork’s share value that day.
“Over the past few months we have taken decisive and focused actions to improve our business,” Tolley said in a statement. “The steps we are taking now to achieve our goals not only help us achieve profitability and sustain growth, but will position us to serve our members better for the long term. I emphatically believe we’re on the right path, already gaining momentum and seeing promising results from our efforts.”
Tolley was added to WeWork’s board of directors in February 2023 and had previously served as chief financial officer for satellite provider Intelsat S.A. from 2019 to 2022. Prior to that, he was chief financial officer for OneWeb, a private equity partner at Blackstone (BX), from 2000 to 2011 and was vice president of the investment banking division at Morgan Stanley (MS).
It’s been a rocky few months for WeWork shareholders.
The small uptick in its stock price in September was short-lived when, during the first week of October, WeWork skipped paying up to $95.2 million in interest payments to lenders. Its ultimate plan was to negotiate with the banks to improve its capital structure, but the value of its shares dropped 24 percent.
WeWork said it has “sufficient liquidity” to make the payment “and may in the future decide to do so.”
In April, the coworking giant received an ominous warning from the New York Stock Exchange (NYSE) that it was in danger of being delisted after its stock price dipped below $1 per share for more than a month.
This caused reverberations in WeWork’s credit rating. S&P Global Ratings downgraded the company from a CC rating, meaning default was a near certainty, to an SD rating reserved for firms that are in “selective default.”
Mark Hallum can be reached at mhallum@commercialobserver.com.
