WeWork (NYSE:WE) has stated that there is “substantial doubt” over its ability to continue to operate, citing continued losses and increased member cancellations of its office spaces. The shares fell 23.74% in after-hours trading after the market closed on Tuesday (8).

In the year, the drop in quotations is around 85%, with the share traded at $0.21 at the close. The market value is US$ 450 million, less than 1% of the valuation of $47 billion that it reached in early 2019 after raising funds with SoftBank.

The company that enshrined the coworking model will focus over the next 12 months on reducing rental costs, renegotiating more favorable lease agreements, increasing revenue and raising capital, as reported by WeWork in a statement to the market.

The company did not say whether the measures apply to the operation in the main Latin American markets, which include Brazil, Argentina, Chile, Colombia and Mexico. This operation is under the command of SoftBank Latin America Fund, according to a joint venture announced in May 2021.

WeWork’s notice comes just months after the company struck a deal with some of its biggest creditors and SoftBank, its main investor, to reduce its debt load by about $1.5 billion and extend other maturities.

And it occurs despite the improvement in the numbers presented for the second quarter: revenue reached US$ 844 million in the second quarter, with an increase of 4% on an annual basis; the net loss was $397 million, down from $635 million a year earlier. And the adjusted Ebitda was $36 million, also below the $134 million in the same period of 2022.

The company ended the quarter with a real estate portfolio of 777 properties in 39 countries, totaling 906,000 jobs. Physical occupancy was at 72% versus 71% a year earlier.

WeWork bonds also trade heavily undervalued. Certain of the company’s unsecured bonds due in 2025 traded at 33.5 cents on the dollar, according to Trace data.

Many WeWork offices, which emptied out during the early months of the Covid-19 pandemic, have shown still gradual progress towards capacity over the past year.

The recovery seems so far unsustainable, according to analysts. WeWork stated that occupancy dropped in the second quarter compared to the previous quarter.

The New York-based company has also seen a change in leadership. Sandeep Mathrani, who took over as chief executive in early 2020, left in May to become a partner at private equity firm Sycamore Partners.

WeWork currently has an interim CEO. Mathrani took over shortly after co-founder and former CEO Adam Neumann was ousted in the face of a series of corporate scandals that helped derail the startup’s plan to go public in 2019.

On Tuesday, WeWork said three of its independent board members will be replaced by four new board members.

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