Shares of Leading coworking space provider WeWork came crashing down on 1 November after the company in its filing announced that it was filing for bankruptcy as early as the next week.

The company is preparing for Chapter 11 protection in the state of New Jersey. The news of the company hit the investors hard as shares of WeWork plummeted more than 40% in after-hours in New York trading. 

Earlier on 31 October, the company entered into an agreement with its creditors for temporary postponement of payments for some of its debt. 

The New York-based firm that was at one point the US’ most valued start-up has been struggling since its initial attempt to sell shares on the stock market in 2019 due to concerns about its debt, losses, and management. 

In August, the shares of the company had warned that it fears going bankrupt and its ability to stay in business as it is burning through its cash reserves, causing the shares to crash near zero. 

WeWork interim CEO David Tolley had said, “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships,”

In the second quarter, the company’s net loss narrowed to $349 million against the $577 million reported in the year-ago quarter. However, the company burned through $646 million in cash in the first six months of the current fiscal year. As of 30 June, the company had $205 million cash in hand and has never turned profitable. 

The company had raised $22 billion in funding from its investors, such as Softbank, Goldman Sachs, BlackRock, and Insight Partners, but the company continued to lose money.