BY Fast Company 2 MINUTE READ

WeWork is warning investors there are “substantial doubts” it will be able to stay in business. The company, in its second-quarter earnings, released late Tuesday, cited continued member churn and diminishing liquidity as reasons for the concern. Shares, which were down 5% Tuesday, fell another 18% in after-hours trading. WeWork said it hoped to reduce operating costs, improve member retention and growth, and further optimize its real estate holdings to better improve its chances of survival. It also reorganized its board of directors, appointing four new members, while three existing board members have stepped down.

The warning comes just months after the company arranged a deal with creditors to cut its debt load by $1.5 billion. It also follows the appointment of David Tolley as interim CEO, replacing Sandeep Mathrani in mid-May. CFO Andre Fernandez left the company in June.Mathrani had taken the reins at WeWork after cofounder Adam Neumann was pushed out for failing to take the company public in 2019.

(And Neumann has hardly disappeared from the real estate world. Last year, he raised $350 million for Flow, his attempt to transform the residential rental real estate market, which set the company’s valuation at $1 billion before it opened its doors.)

WeWork had been making some progress in getting people back in its offices, but that appears to be a short-lived bounce. Occupancy dipped a bit in the most recent quarter, taking it to its lowest levels since last fall. Riding atop all of this is a ticking clock from the New York Stock Exchange. In April, the company received a continued listing standard notice from the exchange, stating it had fallen out of compliance, which could potentially lead to a permanent halt in trading of its stock.

If it is unable to get shares to close above $1 before late October, it could be delisted.

As of 5:40 p.m. ET Tuesday, the stock was trading at about 17 cents a share. WeWork was one of the original coworking companies and, at one time, had a valuation of $47 billion. That estimation, however, was largely based on hype, which was revealed in 2019 when an IPO prospectus showed the company’s true financial state. The company that so many people believed to be hyper-profitable was, in fact, barreling toward a financial crisis, with $900 million in losses in the first half of 2019, $47 billion in lease obligations, and expenses so high that it lost $1 for every dollar it made. The real rancor, however, was reserved for Neumann and his erratic management style and overambitious growth strategy. Prospective investors were aghast that the corporate governance included language granting Neumann’s wife the ability to name his successor if something happened to him. And the $480 million golden parachute he received when he finally walked away from the company didn’t quell that criticism, either.