The descent of WeWork (US:WE) from world-changing office space provider to a shaky listed entity has cast a spotlight on the whole flexible office sector. On paper, companies that can provide cheaper office space in a work-from-anywhere post-Covid-19 world should be flourishing, but the realities of being a middleman at a time of industry uncertainty have started to bite.
WeWork said last week that there was "substantial doubt about [its] ability to continue as a going concern" without a rapid turnaround in its business. A subsequent bounce from buyers driven by to replicate the 'meme stock' phenomenon seen with other struggling US companies does not hide the fact WeWork has lost 98 per cent of its value since its IPO in late 2020.
There is obviously an appetite for a more successful version, however: in the UK, IWG's (IWG) share price jumped 10 per cent on the morning of its results after management said it was considering a US listing, and investors pondered the potential impact of a WeWork collapse. Similarly, Stifel analysts said a potential WeWork closure would "provide a growth opportunity" for real estate investment trust (Reit) Workspace (WKP).