On Tuesday, August 11th, 2020, WeWork, the office-sharing company once valued at $47 billion, filed for bankruptcy protection. This filing comes after a rapid collapse of the company’s valuation since November 2019, when it was estimated to be worth around $47 billion (there were rumored talks of an IPO at the time).
The company, which had been founded in 2010, had become notorious for its hefty losses and heavy spending leading up to the filing. It posted a record-breaking loss of $2.9 billion in the first half of 2020 and was estimated to have spent more than $10 billion over the past 10 years.
The bankruptcy filing is a first step in the company’s plan to reorganize its debt and find new investors. It is also part of its attempt to right-size its operations to reclaim profitability. The company said it has secured up to $1.75 billion of debtor-in-possession financing from JPMorgan Chase, Baron Capital, and SoftBank’s Vision Fund.
WeWork’s co-founder, Adam Neumann, stepped down as CEO in September 2019 when it became clear that the company’s valuation was too high and it was unsustainable in the long run. Its other co-founder, Miguel McKelvey, remains with the company as chief culture officer.