WeWork raises going-concern doubt, shares tank

(Reuters) -WeWork Inc on Tuesday raised “substantial” doubt about its ability to continue as a going concern and said three board members had stepped down, sending its shares down 27% in extended trading.

The workspace provider also issued a warning that its management needed to raise additional capital to keep the company afloat and maintain liquidity over the next 12 months.

The company had previously said its actions to restructure debt and operations had eased worries over its ability to continue as a going concern.

WeWork struck deals in March to cut its debt by about $1.5 billion and extend the date of some maturities to preserve cash.

The company, which is yet turn a profit since going public, has struggled to cope with the troubles in the tech sector, where mass layoffs have become rampant.

It has also seen an exodus of top executives, including the resignation of CEO Sandeep Mathrani and CFO Andre Fernandez this year, compounding its troubles.

Mathrani was hired in 2020 and tasked with the company’s turnaround amid rising investor concerns over corporate governance standards.

WeWork on Tuesday said it was still continuing its search for a permanent CEO and that it had added four board members after three members stepped down.