Item A: $47B gone
WeWork, once the $47 billion poster child of preposterous tech valuations, is set to file for bankruptcy in the coming days, according to The Wall Street Journal. The company missed interest payments on its debt in early October, and now faces a looming deadline.
It’s easy to lump WeWork in with some of the more abstract tech concepts that boomed during the pandemic — looking at you, NFTs — but for every crazy story about waterslides, private jets, and tequila, WeWork did win thousands of real customers to its locations. Indeed, even today, WeWork operates more than 770 offices in 39 countries.
But even if WeWork’s customers liked the high-end spaces it had built, the business model itself just never stacked up. In fact, it wasn’t even close. Since 2018, WeWork ran up total operating expenses of $32bn to run its business. Total revenues over the same period? Just over half of that ($16.2bn). You don’t need to be an accountant to know that something had to give eventually — and even though more experienced management seems to have narrowed the losses, it might be too little too late.
WeCrashed
With some $10 billion in lease obligations, extending from the latter half of this year through 2027, any bankruptcy is likely to be messy... but, unfortunately for screenwriters, the TV show’s already been made.
