2023-08-08 18:21:43 ET
Class A shares of WeWork ( NYSE: WE ) on Tuesday plummeted more than 24% in extended trading, after the co-working space provider said "substantial doubt" existed about its ability to continue as a going concern.
The company also reported Q2 results that showed shrinking cash and cash equivalents and declining memberships. Additionally, WE announced several changes to its board.
WE stock has slumped more than 37% since mid-May when the company announced a surprise exit of then CEO Sandeep Mathrani after a three-year tenure.
"As a result of the Company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern," WeWork ( WE ) said in a statement .
WE posted Q2 GAAP earnings per share of -$0.21, missing estimates by $0.09 . Revenue climbed 3.6% Y/Y to $844M and beat expectations by $3.93M .
As of June 30, 2023, WE's systemwide real estate portfolio supported 653K physical memberships (-1% Y/Y) while its consolidated real estate portfolio supported 512K physical memberships (-3% Y/Y).
"Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships," WE interim CEO David Tolley said.
WE said cash and cash equivalents as of June 30 was $205M, compared to $224M as of March 31, 2023. Total liquidity as of June 30 was $680M.
WeWork ( WE ) in a separate statement said it was continuing its search for a permanent CEO. It also replaced three of its directors and added another.
More on WeWork
- WE Quant rating
- WeWork issues $175M of notes to SoftBank and unnamed investor (updated)
- WeWork: Solvency Is Secured For Now
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WeWork raises going concern doubt, stock craters more than 24% after hours