Shares of the workspace solutions provider WeWork (NYSE:WE) are down nearly 12% at the time of writing after announcing a 1-for-40 reverse stock split of its Class A and C common shares.
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The announcement comes after approval from the company’s Board. Its shares are expected to begin trading on a post-split basis on September 5. WeWork is undertaking the maneuver primarily to regain compliance with the New York Stock Exchange’s minimum closing price requirement of $1.
WeWork is yet to turn a profit, and its share price has nosedived from highs of $13 after going public in 2021 to the current level of $0.16. Moreover, its shares have declined by 97% over the past year, bringing the company’s market capitalization to the present $336 million.
Adding to this, earlier this month, WeWork also cast doubts over its ability to remain a going concern. These warnings came amid financial losses and the company’s requirement for cash.
In the meantime, the Street has a $0.20 consensus price target on WeWork alongside a Hold consensus rating.
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