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WeWork To Run Out Of Cash By Next Month Without New Funds

WeWork To Run Out Of Cash By Next Month Without New Funds

WeWork
WeWork could run out of cash a lot sooner than mid-2020 — the event horizon analysts originally predicted after its IPO collapsed. Photo edit by Autumn Keiko

WeWork could run out of cash a lot sooner than mid-2020 — the event horizon analysts originally predicted after the office-sharing company postponed its IPO amid lukewarm demand and growing investor concerns.

The company needs new financing before the end of November to avoid running out of money, two people familiar with the matter told Bloomberg.

A disastrous IPO attempt resulted in WeWork CEO Adam Neumann stepping down in September from the company he helped found.

The coworking-space provider was hyped to have one of the highest-profile Wall Street debuts of 2019 with a listing originally expected in September. Instead, it became one of the most high-profile IPO debacles in recent memory, CNN reported.

WeWork was counting on a $6 billion loan contingent on a successful IPO to meet its cash needs. Instead, the company’s new co-CEOs have been cutting jobs and spinoff businesses in an effort to stem the losses.

Help could be on the way. JPMorgan Chase, the Wall Street bank that led preparations for the IPO, is leading financing negotiations and considering a large contribution to the new package, several people familiar with the matter told Financial Times.

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A person familiar with the matter told Bloomberg that WeWork is trying to reach terms on a financing package to ease the cash crunch, including one contingent on an equity injection, most likely by SoftBank Group Corp.

A deal is expected in the next two to three weeks.