Featured in this episode of Tech News of the Week
WeWork is on the precipice of filing for bankruptcy according to the Wall Street Journal. The real estate company, masquerading as a tech startup despite clearly NOT being a technology company, had missed interest payments owed to bondholders on October 2nd, triggering a 30-day grace period in which it must make good on what it owes.
Remember, bonds are supposed to be a guaranteed investment for the holders, so when the issuer of the bonds fails to make payments it results in a default and often a bankruptcy or forced liquidation of assets.
WeWork was once valued at a frankly insane $47B, after picking up a $5B investment from Soft Bank despite never, ever, ever being profitable. While that might work for actual tech startups that are focused on growth at all costs, it doesn’t work so well in the real estate world.
When WeWork tried to IPO in 2019, the offering was delayed until 2021, where it hit the open market at a mere $9B valuation. Since that time, the market cap of the company has continued to drop, with a current market cap of $44M. There is every reason to believe that a bankruptcy filing will come in the next week or so, and the vultures can descend to pick apart the corpse of the once bloated WeWork whale.