The multinational office and coworking space rental WeWork has announced that it will proceed on September 1 to a grouping of its shares (‘contrasplit’) that will consist of exchanging one new share for every forty old ones, in order to to increase the trading price of the company’s securities.
The ‘reverse split’ is carried out primarily to increase WeWork’s trading price per share and return to meeting a minimum closing price of one dollar per share, required by the New York Stock Exchange to maintain the security’s listing. .
“When the reverse stock split becomes effective, every 40 WeWork common shares issued and outstanding will be automatically combined into one WeWork common share,” the company explained.
The multinational has advised that it will not issue fractional shares in connection with the transaction, so holders of Class A common shares and Class C common shares will receive an interest-free cash payment instead of fractional shares.
Likewise, WeWork has stressed that it does not expect the pooling of its shares to affect its current or future business operations.
WeWork shares lost more than 18% of their value on Wall Street this Friday, deepening the collapse they have accumulated since they reached a record price of $14.97 on October 22, 2021, one day after their launch. stock debut.
Last week, WeWork reported that it registered losses of 349 million dollars (318 million euros) in the second quarter of the year, which represents a decrease of 39.5% compared to the ‘red numbers’ posted by the company in the same period of 2022, also warning that “there is substantial doubt” about its ability to continue as a going concern, according to Europa Press.
“As a result of the company’s losses and projected cash needs, combined with increased member turnover and liquidity levels, there is substantial doubt about the company’s ability to continue as a going concern,” the multinational admitted. when presenting their accounts for the second quarter.
In this sense, WeWork defended that its ability to continue as a going concern depends on the successful execution of the plan to improve the liquidity and profitability of the company in the next 12 months, including a reduction in rental and leasing costs through of restructuring measures and the negotiation of more favorable conditions.
Likewise, the multinational pointed out the need to increase its income by reducing member turnover and increasing sales, as well as controlling expenses and limiting investment, while seeking to raise additional capital through the issuance of debt or equity securities or through the sale of assets.
WeWork shares were listed on the Nasdaq in October 2021 by BowX Acquisition, a special purpose buying company (SPAC), two years after the company was forced to cancel its exit in September 2019. a Bolsa, shortly after Adam Neumann, co-founder of the firm, decided to leave the position of CEO.