WeWork, the short-term office-rental company, is experiencing a steep decline in its stock value, raising concerns about its ability to continue operating. Once valued at an impressive $47 billion, WeWork issued a warning alongside its second-quarter earnings results, citing significant losses, projected cash needs, increased member turnover, and liquidity challenges.

The company went public in October 2021, merging with a special-purpose acquisition company (SPAC) after withdrawing its initial public offering (IPO) plans. However, WeWork's market capitalization dropped to $447 million following a 19% decrease in premarket trading.

To ensure its survival, WeWork acknowledges that it must execute a turnaround plan focused on improving profitability and liquidity over the next twelve months. This plan involves implementing cost-cutting measures related to rent and tenancy expenses. Additionally, the company aims to stabilize revenue by reducing member losses and increasing new sales.

WeWork further recognizes the need to control expenses and seeks additional capital through various avenues such as debt issuance, stock sales, or asset divestment.

As of Tuesday's close, WeWork stock has plummeted by 85% since the beginning of 2023.

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