/cloudfront-us-east-2.images.arcpublishing.com/reuters/W2LUALKFTFIIFFQOBURAN2RYQE.jpg "Once worth billion, WeWork shares near zero after bankruptcy warning")
Aug 9 (Reuters) – WeWork (WE.N) shares approached zero on Wednesday after the one-time startup darling warned it could go bankrupt in a stunning reversal of fortune for a company that was once privately valued at $47 billion.
The SoftBank-backed company has been in turmoil ever since its plans to go public in 2019 imploded after investors recoiled at its hefty losses, corporate governance lapses and the management style of then founder-CEO Adam Neumann.
WeWork’s woes did not abate in subsequent years. It finally managed to go public in 2021 at a much-reduced valuation, but it has never turned a profit. Its major backer, Japanese conglomerate SoftBank, sunk tens of billions to prop up the startup, but the company has continued to lose money.
“WeWork was perhaps the most overhyped startup of recent years,” said Steve Clayton, head of equity funds at Hargreaves Lansdown.
Shares of the company closed 38.5% lower at 12 cents on Wednesday.
Since its debut through a blank-check merger in October 2021, WeWork’s shares have lost nearly all of their value, and were trading on Wednesday at 13 cents for a valuation of roughly $260 million. Numerous executives have departed, including CEO Sandeep Mathrani in May and three board members this week.
The search for a new CEO is on, WeWork said on Tuesday.
The company’s business model involves taking long-term leases and renting out spaces for a short term. It expanded rapidly over the years, but the global coronavirus pandemic made shared office space less appealing.
The WeWork logo is displayed on a screen during the company’s IPO on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., October 21, 2021. REUTERS/Brendan McDermid/File photo
“Fewer and fewer companies from mature large-cap businesses to startups are willing to enter into long-term leases for geographically fixed spaces,” interim CEO David Tolley said on an analyst call on Wednesday.
The ongoing problems are a black eye for SoftBank, which kept pouring money into the company over the last several years. That company’s head, Masayoshi Son, had personally backed Neumann, and bailed out WeWork in 2019 with $10 billion following the botched IPO.
SoftBank took billions of dollars in losses in the aftermath of the WeWork investment. Son subsequently expressed regret over his support of the company, saying that his “judgment was poor in many ways and I am reflecting deeply on that.”
In March, WeWork reached a deal to cut debt by about $1.5 billion and extend the date of some maturities to save cash.
Cost cuts helped WeWork report a smaller net loss of $349 million in the second quarter from $577 million a year ago, but it still burned through $646 million in cash in the first six months of the year. It had $205 million in hand as of the end of June.
“Flexible workspaces have a future in the office ecosystem, but WeWork, in its current state, may not,” BTIG analysts wrote on Wednesday as they downgraded the stock to “neutral.”
WeWork said it was planning to shore up liquidity by cutting rent and tenancy costs, controlling expenses and reducing member churn.
The company’s India division said the bankruptcy warning would not affect that unit.
Reporting by Ananta Agarwal, Chavi Mehta, Shivansh Tiwary, Abhijith Ganapavaram, additional reporting by Amruta Khandekar in Bengaluru;
Editing by Sriraj Kalluvila, Arun Koyyur and Anil D’Silva
Our Standards: The Thomson Reuters Trust Principles.
Russian forces captured a former British Army soldier who was fighting with Ukrainian troops in the Kursk region, according to reports on Monday.
In a video, the prisoner of war was sitting on a bench with his hand restrained as he identified himself as 22-year-old James Scott Rhys Anderson.
Russia’s Tass news agency reported on Monday that Russian security officials confirmed a British mercenary had been captured in the Kursk area.
“I was in the British Army before, from 2019 to 2023, 22 Signal Regiment,” Anderson told Russian authorities while being recorded. “Just a private. I was a signalman. One Signal Brigade, 22 Signal Regiment, 252 Squadron.”
RUSSIA TRICKS YEMENI MEN TO FIGHT IN UKRAINE UNDER HOUTHI SCHEME
Former British Army soldier James Scott Rhys Anderson was reportedly captured by Russian forces in the Kursk region while fighting for Ukraine. (Credit: East2West)
He expressed regret for joining Ukraine in its fight against Russia, explaining he had nearly lost everything.
When he left the military, he got fired from his job and applied on the International Legion (of Ukraine) webpage.
“I had just lost everything. I just lost my job. My dad was away in prison. I see it on the TV,” Anderson said while shaking his head. “It was a stupid idea.”
RUSSIA IS SUPPLYING HOUTHIS WITH SATELLITE DATA TO ATTACK SHIPS IN THE RED SEA: REPORT
Former British Army soldier James Scott Rhys Anderson was reportedly captured by Russian forces in the Kursk region while fighting for Ukraine. (Credit: East2West)
The International Legion for Defense of Ukraine was created at the request of Ukrainian President Volodymyr Zelenskyy after Russia’s full-scale invasion of the country in February 2022.
The Associated Press reported that the Legion is a unit of Ukraine’s ground forces that mainly consists of foreign volunteers.
Anderson reportedly served as an instructor for Ukrainian troops and was deployed to the Kursk region against his will.
In the video, he said his commander took his stuff — passport, phone and other items — and ordered him to go to the Kursk region.
UKRAINE TO ANALYZE FRAGMENTS OF MISSILE FIRED BY RUSSIA CAPABLE OF CARRYING NUCLEAR WARHEADS
FILE PHOTO: Ukrainian servicemen hide from shelling, amid Russia’s attack on Ukraine, near the Russian border in Sumy region, Ukraine August 13, 2024. (REUTERS/Viacheslav Ratynskyi/File Photo)
“I don’t want to be here,” Anderson said.
The AP could not independently verify the report, but if confirmed, it said this could be one of the first publicly known cases of a Western national getting captured on Russian soil while fighting for Ukraine.
The U.K. Embassy in Moscow told the wire officials were “supporting the family of a British man following reports of his detention” though no other details were provided.
Anderson’s father, Scott Anderson, told Britain’s Daily Mail that his son’s Ukrainian commander informed him the young man had been captured.
A serviceman of 24th Mechanized brigade named after King Danylo of the Ukrainian Armed Forces fires a 2s5 “Hyacinth-s” self-propelled howitzer towards Russian troops at a front line, amid Russia’s attack on Ukraine, near the town of Chasiv Yar in Donetsk region, Ukraine November 18, 2024. (Oleg Petrasiuk/Press Service of the 24th King Danylo Separate Mechanized Brigade of the Ukrainian Armed Forces/Handout via REUTERS )
The senior Anderson also said his son served in the British military for four years, worked as a police custody officer, and then went to Ukraine to fight. He told the paper he tried to convince his son not to join the Ukrainian military, and now fears for his safety.
“I’m hoping he’ll be used as a bargaining chip, but my son told me they torture their prisoners, and I’m so frightened he’ll be tortured,” he told Britain’s Daily Mail.
While being questioned, the younger Anderson talked about how he got to Ukraine from Britain, saying he flew to Krakow, Poland from London Luton. From there, he took a bus to Medyka in Poland, which is on the Ukrainian border.
Anderson’s capture comes amid reports Russia is recruiting hundreds of Yemeni men to fight in its war in Ukraine by luring them to Russia under false pretenses in coordination with the Houthi terrorist network, as reported by the Financial Times.
A senior Ukrainian defense official told Fox News that Moscow is trying to involve as many foreign mercenaries as possible in its war against Ukraine, whether from its allies or proxies in poor, impoverished countries.
The Ukrainian Ministry of Defense similarly confirmed the report to Fox News and said, “Russi[a] has escalated this war twice recently. First, when they brought North Korean fighters, and second, when they used [a] ballistic missile in Ukraine.”
Fox News Digital’s Caitlin McFall and Nana Sajaia, as well as The Associated Press contributed to this report.
A cargo plane crashed into a house on its approach to Lithuania’s Vilnius Airport on Monday morning, killing one crew member and injuring others.
Authorities search for answers as they continue their investigation after a Boeing 737 cargo plane crashed into a house near Vilnius Airport in Lithuania on Monday morning.
The DHL cargo plane operated by Swiftair, departing from Leipzig in Germany, crashed while approaching the airport in Lithuania’s capital. A Spanish crew member was killed, and three other people on board were rushed to the hospital, one of them is in critical condition. No one on the ground was reportedly injured.
Speaking on the sidelines of the G7 Foreign Ministers’ meeting in Italy, Germany’s Foreign Minister Annalena Baerbock raised the question of whether the plane crash was a hybrid attack.
“We have to say at this point that we and our Lithuanian partners must now seriously ask ourselves whether this was an accident or, after last week, another hybrid incident. That shows what volatile times we are living in in the middle of Europe,” she said.
Lithuanian officials said one line of inquiry would examine Russian involvement but stressed that no evidence exists yet.
Last month, Western security officials warned that Russian military intelligence may be carrying out sabotage acts against nations in retaliation for their support to Ukraine.
Darius Jauniškis, the chief of Lithuania’s Intelligence, mirrored these concerns and said terrorism cannot be ruled out: “The State Security Department, together with the Department of Operational Services, have warned that these things are possible in the future. We see Russia becoming more aggressive.”
He added that however for now, “we really cannot make any attributions or point fingers at anyone, because there is no information about it.”
Lithuanian Defence Minister Laurynas Kasčiūnas said, “According to the information I have at the moment, I can say that there are no confirming facts that this was some kind of sabotage or terrorist incident. But the investigation will answer all the questions.”
The General Commissioner of the Lithuanian Police, Arūnas Paulauskas, chose not to speculate and said the cause of the crash might be the result of a technical failure or a human error. “But we are not aviation experts here to discuss this matter in such detail,” he added.
Paulauskas confirmed that investigators have visited the hospital, and will talk with the aircraft’s police and other aviation officials when they get the chance.
“As far as I know, the investigators have gone to the hospital. If there is an opportunity to communicate with the aircraft’s pilots to determine the initial causes, as well as with officials responsible for civil aviation.”
Several aviation experts who spoke to local media said they noticed nothing out of the ordinary when they listened to the communication between the crew and the Air Traffic Controller (ATC) that was shared online.
Aviation expert Vidas Kaupelis said it seemed there was “routine communication between the air traffic controller and the pilot”.
“They didn’t declare any emergency situation, they didn’t speak of any technical failures or fires,” the expert added.
ADVERTISEMENTThe Chief of the Aircraft Accident and Incident Investigation under Ministry of Justice, Laurynas Naujokaitis, said German and Spanish investigators are due to arrive in Lithuania to assist local authorities with the probe.
“Currently we have an answer that a German safety probe institution is sending four investigators, Spain safety probe institution is sending two,” he said. “We are still gathering information regarding technical maintenance, meteorological, navigation and qualification information.”
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