WeWork Posts Record Loss In Q3: Report

Co-working space startup WeWork made a net loss of $1.25 billion in the third quarter in 2019, the company told its investors on Wednesday, according to the Wall Street Journal.

What Happened

The New York-based company saw a total revenue of $934 million, a 94% increase compared to the same quarter revenue last year, the Wall Street Journal reported.

The growth in revenue was offset by its overbearing operating costs to cause its biggest net loss ever. 

WeWork previously posted a $638 million loss in the second quarter this year. The startup has lost over $2.9 million in the past twelve months.

SoftBank ‘Regrets’ Acquisition

The co-working startup was saved from bankruptcy by one of its largest investors SoftBank Group Corporation SFTBY, in October.

The Tokyo-based investment firm acquired a controlling 80% stake in WeWork and brought significant changes in the startup’s top management. 

The rescue deal saw the startup’s controversial co-founder Adam Neumann severing most of his ties with the company and walking away with $1.7 billion.

SoftBank’s chairman said last week that the WeWork investment was a “judgment error” on his part and that he was wrong to turn a blind eye to a lot of Neumann’s “negative aspects.”

The veteran firm posted a record $6.5 billion loss in the third quarter as well, according to Bloomberg, with major losses from its investments in WeWork and ridesharing company Uber Technologies Inc UBER. WeWork alone cost SoftBank $4.6 billion.