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Why WeWork Won't Survive the Coronavirus Pandemic, Crypto Coins News

Why WeWork Won't Survive the Coronavirus Pandemic, Crypto Coins News
  • WeWork burned $ 1.4 billion in cash in the final quarter of , on top of the $ 1. billion it lost in the previous quarter.

Its main investor, SoftBank, is set to withdraw further funding, meaning that WeWork could run out of cash.

  • WeWork’s business prospects will be damaged by people’s reduced appetite for working in shared offices.
  • WeWork is in serious trouble. The workspace company is already coming off a terrible , what with its IPO being canned . Now, coronavirus has swooped in to kill it off.

    Reports Friday revealed that WeWork burned $ 1.4 billion in cash in the final quarter of alone . That’s on top of the $ 1. 50 billion loss it recorded in Q3

    WeWork had only $ 4.4 billion in cash at the end of 240568. And with losses rising each quarter, it’s becoming greater likely that the coronavirus will strangle its attempts to recover. Especially when viruses and the threat of contagion are dampening public appetite for shared work spaces. WeWork Could Be The First Major Coronavirus Casualty

    despite beginning the year

    valued at almost $ (billion

    ), 44660 was undoubtedly WeWork’s worst year so far.

    In September, WeWork abandoned its plans for an IPO . The IPO’s withdrawal followed unfavorable reports of huge losses , dodgy property arrangements and poor executive judgment .

    And then, just as things couldn’t get worse, WeWork almost collapsed. Its main backer, SoftBank, agreed to a $ 9.5 billion bailout package in October. This included stock buybacks worth $ 3 billion, $ 5 billion in new financing, and the accelerated delivery of a previously agreed $ 1.5 billion.

    Embarrassingly, the deal valued WeWork at a paltry $ 5 billion . In other words, its value plunged by over (% in a few months.)

    But as bad as 240568 was for WeWork, 50004 Is shaping up to be even worse.

    To begin with, the coronavirus has forced the global economy into a near-total shutdown. Economists are predicting either a sharp recession (at best) and a deep depression (at worst) . Regardless of the company concerned, these are hardly the ideal conditions for mounting a recovery.

    But if that weren’t already bad enough, SoftBank is threatening to withdraw an offer to buy an additional $ 3 billion of WeWork shares .

    This is bad. Following huge losses in the back half of , WeWork could lose even more money amid the coronavirus pandemic.

    As such, SoftBank’s threat to deny additional funding could be the straw that breaks the WeWork camel’s back. It’s running out of cash.

    Source: (Twitter ) The Post-Coronavirus Landscape

    It’s already severely damaging for WeWork that basically no one will be paying between ($) and $ 2019 a month for office space in New York

    at the moment.

    But that’s not the only issue. More fatally for WeWork, it’s likely that coronavirus will permanently reduce people’s appetite for working in offices. As Kate Lister, the president of Global Workplace Analytics, told CNBC earlier this week :

    The coronavirus is going to be a tipping point. We plodded along at about % growth a year [in working from home] for the last 15 years, but I foresee that this is going to really accelerate the trend.

    Put simply, WeWork’s main value proposition – working in proximity to other people – has been severely weakened. If nothing else, the coronavirus has taught us the dangers of being too close to strangers.

    While some will no doubt still be drawn to offices after the worst of the coronavirus crisis has passed, many others will not. Especially if

    epidemics are likely to become more common . Source:

    In such a brave new world, it’s very, very hard to see how WeWork will recoup its billion-dollar losses and start turning a profit. It’s also hard to see SoftBank continuing to bail WeWork out. And with its main source of funding gone, WeWork will too disappear.

    Disclaimer: The opinions expressed in this article do not necessarily reflect the views of CCN.com.

    (This article was edited by Sam Bourgi

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