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WeWork Inc. (formerly trading as WEWKQ) was the poster child for taking advantage of the gap in the market with the offering of flexible office space to freelancers. They rose with rapid expansion during the 2010s. Now, after filing for Chapter 11 bankruptcy and restructuring its business model, traders and investors face an important question: can the company rise from the ashes into a market that has changed?
For interested parties following this restructuring, it's important to understand what value remains in the operating business and what must be proven before any future relisting is possible.
In November 2023, WeWork filed for Chapter 11 in the United States, citing untenable lease and debt burdens caused by a collapse in the demand for office space. By April the following year, they disclosed that part of their negotiation was aimed at a significant reduction in their rental commitments. This means amendments to 150 rental agreements, exiting 150 others, and renegotiating the terms of a further 50. This is a renegotiation of $8 billion, or over 40% of their rental obligations. By June 2024, WeWork cut US$4 billion in debt and had reduced its locations from 777 to 586 as part of the process.
For investors, the critical takeaway is that WeWork has improved its cost structure and liabilities. Although this is a good start, the next steps are to demonstrate their commitment to revenue growth, profitability, and scaled operations.
When evaluating a turnaround story like WeWork, you have to look at valuation and operating metrics. In the case of WeWork, these metrics are either unattractive or unavailable.
Trading of WEWKQ effectively ended on June 11, 2024, when the ticker was delisted and shares were cancelled, marking the company's transition to a non-exchange-listed status. Some financial databases, such as Fintel, still display historical WEWKQ information, the ticker no longer trades on any exchange or OTC venue. The equity was cancelled as part of the bankruptcy process. Any future equity participation would require a relisting.
WeWork showed a TTM (trailing twelve months) of $3.36 billion with a net loss of $1.64 billion and had a negative EPS (earnings per share) of $75.60. In the year leading up to June 2024, the WeWork stock price has decreased by -99.59%.
Because of the restructuring process, P/E and other metric is unavailable for a company in Chapter 11 and shares are delisted. Given this environment, investors do not have their standard valuation metrics to understand the current situation. The company is effectively in a "turnaround watch" phase with few reliable comparable elements.
For investors in WeWork, the structural risks are significant, and they must be assessed with care.
The shift from remote to hybrid work models reduced the need for long-term leased office space for workers. Although lease renegotiations are part of the Chapter 11 bankruptcy, the legacy obligations aren't easily erased. This may indicate a risk when challenges arise from these contracts.
Additionally, the long-term impact of the brand's previous failures can't be overlooked. This creates a hesitancy amongst investors and potential tenants. WIth no active market for WeWork, governance transparency is limited, because the business is no longer subject to the reporting obligations of being listed. Lastly, the business rescue at this level with an altered business model can be difficult and WeWork must demonstrate operational success in the new business model.
The major reduction of its rent and debt provides a more hopeful starting point. Even with the more hybrid workplace models, flexible workspace demands are still growing and expected to grow to $136.5 billion by 2032.
The potential of the repositioning is that if WeWork can deliver with stable occupancy, positive cash flows, and meaningful growth, the stock will attract investors willing to invest to build the brand back up.
One nuance is worth watching: hybrid work remained the dominant model in 2024. Gallup explains that 53% of U.S. full-time employees now split between home and office. Furthermore, according to Moody's in June 2024 the average vacancy rate in America's top metros stood at 20.1%. The global flexible office market accounted for USD 40.12 billion in 2024 and is predicted to increase to approximately USD 196.17 billion by 2034.
According to Business Insider, WeWork CEO David Tolley argued that U.S. tariff situation, while unpopular with some, may strengthen demand for flexible offices because companies put off long term commitments in this uncertainty. His stance suggests that volatility in global trade policy could indirectly support WeWork's shorter-term, lower-commitment model.
This points to an environment where the work-from-home or hybrid environments aren't a thing of the past. Companies may avoid long term leases but still need office space. Both of these can serve as a contribution to WeWork, if they can achieve sustainable profitability.
The situation WeWork finds itself in is not new; let's look at other examples of corporate turnaround stories.
Peer turnarounds data highlight the challenge for WeWork. Hertz Global emerged from Chapter 11 with strong operating cash flow (~$1.91 B) and modest free cash flow (~$48 M). By contrast, Bed Bath & Beyond continues to struggle, reporting negative free cash flow of –$80 M, with an unmeaningful P/E due to continuous losses.
For WeWork to be seen as a credible turnaround, it must show meaningful cash-flow generation and operational stability.
For those tracking WeWork's restructuring progress, several operational indicators will determine whether the company can stabilize and eventually re-enter public markets:
From an investor standpoint, WeWork remains a high-risk, high-uncertainty scenario. The company's restructuring has cleared major hindrances, like debt and rental agreements, all of which is a necessary first step. However, the stock currently lacks reliable valuation metrics that usually give insights on the business.
Investors should watch several catalysts shaping WeWork's path. Short-term triggers include lease renegotiations, debt reduction, and operational stabilization. Longer-term indicators include improving occupancy, positive cash flow, and sustained profitability, showing whether the turnaround gains traction.
For those following post-bankruptcy developments, WeWork's future hinges on whether it can translate cost reductions into measurable operating improvements. For long-term investors seeking clearer fundamentals, it's too early to tell. The key decision point will be whether WeWork can deliver measurable improvements in cash flow and occupancy over the next 12-24 months. Until measurable growth is seen, the path is uncertain and the risk is high.
Benzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.
