Shares of office-space leasing company WeWork — once valued at $47 billion — plummeted Wednesday to mere pennies after the company warned that “substantial doubt exists” about the its survival.
The pioneering co-working company, founded by eccentric Israeli entrepreneur Adam Neumann, suffered a net loss of $397 million in the three months ended June 30, according to its second-quarter earnings report released after the market closed Tuesday.
WeWork stock plunged more than 25% after the opening bell to trade at just 16 cents a share — dropping its market cap to $335 million. It’s stock has nosedived more than 95% since it went public in 2021.
Interim CEO David Tolley — who took over after Sandeep Mathrani’s unexpected exit — blamed WeWork’s lackluster performance on “excess supply in commercial real estate, increasing competition and macroeconomic volatility.”
Tolley said that these factors drove members away more than the company anticipated.
WeWork’s management added that “as a result of our losses… substantial doubt exists about the company’s ability to continue as a going concern.”
The company added that its future depends “upon successful execution of management’s intended plan over the next 12 months.”
Representatives for WeWork didn’t immediately respond to The Post’s request for comment.
The company’s value shot up from $17 billion to $47 billion in 2019 — the year before the pandemic emptied office buildings and sparked the work-from-home phenomenon — when Japanese conglomerate SoftBank’s invested in Neumann’s brain-child with plans to take it public.
At the time, WeWork operated 850 locations across 30-plus countries.
However, it all came crashing down by September of that year when investors criticized Nuemann for selling nearly 30% of the company’s equity to SoftBank and its associated funds for an unrealistic price.
The IPO failed and cost Neumann his job, though his exit deal made him a billionaire.
It was also revealed that Neumann ran a shoddy ship, which allegedly included drugs, alcohol and parties as a big part of the work culture.
According to a report by The Wall Street Journal, Neumann said he likes tequila to flow freely, and would take executive retreats where he’d pour guests glasses of $110-per-bottle Don Julio 1942 to start the morning.
His friends and former colleagues also told the outlet that Neumann enjoyed smoking marijuana, and would often smoke while airborne in his Gulfstream G650 private jet.
WeWork has been decreasing its portfolio since Neumann’s departure and went public in 2021 through a special purpose acquisition company.
According to its website, WeWork currently operates 717 co-working offices.
