The owner of WeWork declared to the employees that the financial team of the company had reduced the cash burn rate almost by half of what it had been at the end of the previous financial year. The owner also shared the news of acquiring $1.1 billion commitment in a new financing project from SoftBank Group Corp.
The company issued an email to its employees to inform them about the impact of the Coronavirus pandemic on the business operation of the second quarter. However, the financial position of WeWork continues to be strong, as per the contents of the email. The chief financial officer of WeWork, Kimberley Ross, said that the timely efforts put in by the company to become a cash-conscious business organization have helped in attaining a secure monetary position amid the pandemic and has also contributed to the quick adaptation to the new situation along with streamlined navigation to the harsh economic reality. Ross is hopeful that the robust financial position of the company will aid in the achievement of the financial objectives of WeWork.
The chief financial officer also stated that the gross revenue has increased by 9% from the previous year and now stands at $882 million. WeWork issued the report of the first quarter, according to which, the revenue has exceeded the limit of nine figures and reached $1.1 billion, and the cash burn is about $482 million. The company possesses cash funds of $4.1 billion along with unfunded cash commitment, inclusive of the new financing of $1.1 billion. According to the financial reports of July issued by WeWork, the company anticipates a positive trend in the cash flow by 2021. As revealed by the spokesperson of SoftBank, the amount of $1.1 billion is the final debt facility that is to be included in the transaction report of October.
The previous financial quarter ended for the company, WeWork, with 612,000 registered members, which is a decrease from 693,000 from the financial quarter before that. Soon after, the company, WeWork, met with a dramatic collapse in reputation and finance, owing to the occurrence of corporate mismanagement. Ever since the unfortunate incident, the company has implemented rigorous financial regulations. However, still, WeWork is badly trapped in a mesh of messy lawsuits that might require the company to pay damages of $3 billion to the existing stockholders of the company.