WeWork on Tuesday said there was "substantial doubt" about its ability to stay in business, sending its shares down by nearly 20%.
The news came in the company’s second-quarter earnings release which said WeWork had a net loss of $397 million – down from a $635 million loss the year prior.
"[C]ombined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern," the release said. "The Company’s ability to continue as a going concern is contingent upon successful execution of management’s plan to improve liquidity over the next 12 months."
A WeWork logo is seen outside its offices in San Francisco, California, U.S. September 30, 2019. (Reuters/Kate Munsch / Reuters Photos)
WeWork said it has replaced three board members and added another, stating that it was still continuing its search for a permanent CEO after Sandeep Mathrani stepped down in May.
The workspace-sharing startup will host an earnings conference call at 8 a.m. EDT on Wednesday.