US media reports have suggested that WeWork, which provides office-sharing services, may be filing for bankruptcy as soon as the next week.
The BBC attempted to solicit a response from WeWork, but the company chose not to comment.
Once the firm was viewed as a beaming prospect for the workplace. However, it has encountered a lot of difficulties, with a deplorable attempt to bring stock to the public in 2019 as well as the relinquishing of one of its founders.
The outbreak of the pandemic had a major impact on the company, particularly with the increasing number of people opting to work remotely.
According to the Wall Street Journal, which first reported the story, WeWork may be looking to file for bankruptcy in New Jersey.
Reuters also reported the information, according to a source who was aware of the incident.
A WeWork representative released a statement noting that they "will not be commenting on rumor or speculation."
On Tuesday, the corporation informed the US financial regulator that it had come to an accord with creditors to delay repayments on some of its debt for the time being.
Tuesday's after-hours session in New York saw WeWork's stock plummet by over 40%.
Jane Sydenham, the investment director at Rathbones, declared to the BBC that the concept of WeWork had been "a great idea" when it first emerged.
She highlighted that having the ability to be flexible in one's work and to be able to use offices on an as-needed basis is a beneficial opportunity.
I believe the issue with WeWork was its over-extension, its borrowing of too much capital, its acceleration to take over many locations too rapidly, and the lack of necessary controls and safeguards for how a company should be run.
Ms Sydenham stated that an increase in interest rates had a negative effect on WeWork, as they now must pay more for borrowing.
Since their debut on the stock market in 2019, the New York-based company has faced difficulties due to worries regarding their liabilities, financial losses, and leadership.
Adam Neumann stepped down as chief executive one week prior to the company officially announcing that its share sale had been abandoned.
The firm stated that a close examination of his leadership had become a major source of disruption.
Only a few months after the unsuccessful listing, the COVID-19 crisis swept in, bringing forth a shift to remote work and provoking criticism from tenants who were eager to terminate their contracts with WeWork.
Nevertheless, executives maintained the organization's functionality, disposing of subsidiary businesses, reducing staffing and either terminating or changing numerous contracts, in an effort to minimize the organization's losses before it became insolvent.
In 2021, WeWork became listed on the New York Stock Exchange with a substantially decreased valuation.
SoftBank has invested tens of billions of dollars into WeWork despite the company's losses.
The firm had an estimated worth of $47bn (£38.7bn) in early 2019, however, its stock market worth has diminished by almost 98% in the last twelve months.
In August, WeWork expressed concern over its ability to remain operational.
At the time, the company stated that they were experiencing issues such as weaker demand and a "challenging" operating atmosphere.
This year has also witnessed the departure of multiple key leaders, such as CEO and Chair Sandeep Mathrani.
By the end of June, the total number of WeWork locations worldwide was 777, spread out across 39 countries.
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