WeWork’s bankruptcy filing could be the start of a broader trend as high interest rates continue to weigh on companies.
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In today’s big story, we’re looking at why WeWork’s bankruptcy filing could be the first of many.
But first, the actors‘ union SAG-AFTRA announced Wednesday evening that it had secured a tentative deal with Hollywood studios to end a strike of nearly four months. That means some film and TV productions will be starting up again.
What’s on deck:
Markets: An oil giant usurped Tesla as the most-shorted stock.
Tech: Leaked numbers reveal the fastest-growing product at Google.
Business: Read this before you start your next group chat.
And now, we should restructure some things.Another one bites the dust
Businesses beware: It’s about to get ugly.
WeWork, the real-estate company that cosplayed as a tech startup, filed for Chapter 11 bankruptcy this week. It’s not exactly a shocking resolution for WeWork, which first showed signs of its demise during a disastrous IPO attempt in 2019.
But one Wall Street veteran believes WeWork will be the first of many companies to succumb to a similar fate. In a recent note, New Constructs CEO David Trainer said hundreds of „zombie companies“ — unprofitable businesses holding significant debt and burning through cash — will also file for bankruptcy, writes Insider’s Jennifer Sor.
Trainer’s concerns aren’t unfounded. More US companies filed for bankruptcy in the first eight months of the year than the total number of bankruptcy filings in 2021 and 2022, according to data from S&P Global.
