Whether the bet succeeds now depends on WeWork renegotiating the costly long-term leases it signed during the boom years and is now unable to pay,
Those deals, many agreed during a period of breakneck growth under founder Adam Neumann, became a crippling burden as the post-COVID shift towards working from home led to a plunge in demand for office space. Neumann quit as CEO in 2019, bowing to pressure from some investors. But this did little to ease its cash crunch. Lease payments consumed nearly three-quarters of its revenue in the second quarter of 2023, the last time it reported financial results.WeWork's dramatic fall followed lavish predictions about its prospects from SoftBank founder Masayoshi Son, despite immense losses as it grew.Son made his name and fortune through high-conviction bets on disruptive technologies, but his unbridled enthusiasm for WeWork tarnished his reputation for picking winners.
MST Financial analyst David Gibson said the credit support was significant, but it was not clear how much of it had been withdrawn.
Source: Loan Digest (loandigest.net)
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