WeWork Stock Shoots Back Up Days After Warning Over Company's Future Viability
WeWork's stock price has recovered nearly all of its losses from earlier in the week after the company revealed doubts about its future.
On Thursday, the coworking operator’s share price began to rise from a low of 13 cents midweek to 21 cents as of 1 p.m. ET on Friday. The stock plummeted earlier this week after the company posted unsatisfying second-quarter earnings. On the week, its share price is down just 4%.
WeWork and another penny stock company, biotech firm Amyris, were the second- and third-most-traded stocks, respectively, on Friday morning, Reuters reported. The activity was spurred by speculative bets from retail traders hoping for these businesses to turn around or merger and acquisition deals. Amyris filed for bankruptcy on Friday.
In its quarterly earnings release Tuesday, WeWork disclosed that there was "substantial doubt" about its ability to continue operations after it revealed a net loss of $397M and declining occupancy figures.
Also on Tuesday, the company announced that three board members were resigning and being replaced by four new independent directors with experience in corporate bankruptcy and restructuring, hinting that the company could be preparing for a bankruptcy filing.
Though the path of bankruptcy would be a blow for a company once worth $47B, it could help WeWork back out of leases and cut more of its real estate portfolio. Interim CEO David Tolley said on an earnings call Wednesday that reducing real estate costs is the company's "primary challenge."
“I’m laser-focused on addressing this issue, which is critical to future success and profitable growth,” Tolley said on the call.
Thursday and Friday's rise in price is still paltry compared to the company's losses — the stock price is down nearly 98% from when it debuted in 2021 and is down nearly 86% in 2023 alone. In April, the New York Stock Exchange warned the company has to get its stock price back above $1 or it risks being delisted. The company is exploring a reverse stock split to bring its share prices back over the dollar mark.
