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."
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.
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The workspace-sharing startup will host an earnings conference call at 8 a.m. EDT on Wednesday.
