WeWork has had somewhat of a meteoric impact in the workspace community, providing creative workspaces with distinct aesthetics for working professionals looking to invest in their future. However, after a few recent years of rapid expansion, WeWork canceled plans of an initial public offering last September. This sudden development stems from a sign that investors are unsettled by the amount of start-ups that have tallied huge losses and may not turn a profit for years to come.
WeWork’s parent company, the We Company, had goals of selling as much $4 billion in shares, as well as receiving a $6 billion in a bank loan that relied on the I.P.O. However, after a fallen through loan and canceled plans to go public, WeWork is now expected to stop its expansion and cope with an impending crisis. According to analysts, WeWork could run out of funds by the middle of next year, a stifling discovery after reporting $2.5 billion at the end of June.
Adam Neuman, the co-founder of WeWork, resigned as chief executive after failing to persuade money managers to buy shares. And with growing concerns around the future profitability of WeWork, struggles renegotiating new loans, attracting landlords, and leasing future spaces are beginning to arise.
WeWork is certainly not dead in the water, but with such a costly expansion, they’re having to shift their focus to prioritize strategic expansion and profitability, placing their intentions to become a public company on the back burner for now. Growing concerns on their ability to pay leases, return profit, and expand may make their future somewhat unsteady, but with an industry that has no plans of disappearing any time soon, there’s still hope for WeWork.
Now, they face a new challenge— rectifying their brand’s identity amongst growing competition.
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