Shares decline by 20.7% in premarket trades following bankruptcy filing

  • WeWork’s stock declined by 20.7% in premarket trades on Monday
  • The stock had soared on its over-the-counter debut last week
  • WeWork filed for Chapter 11 bankruptcy protection
  • Trading resumed over the counter with shares ending their first session up 91.5%
  • WeWork’s bankruptcy was not a surprise, according to independent equity-research firm New Constructs
  • Investors are encouraged to sell stocks of unprofitable companies with poor business models

Shares of WeWork Inc. experienced a rollercoaster ride as the stock declined by 20.7% in premarket trades on Monday. This came after the stock had soared on its over-the-counter debut last week, following the company’s filing for Chapter 11 bankruptcy protection. Trading resumed over the counter, with shares ending their first session up 91.5%, continuing the strange trend of the bankruptcy bounce. However, the bankruptcy filing did not come as a surprise to independent equity-research firm New Constructs, which had previously warned investors about the company’s valuation. They encourage investors to sell stocks of unprofitable companies with poor business models. WeWork’s bankruptcy serves as a reminder of the excess liquidity and reckless behavior that has characterized the market in recent years.

Public Companies: WeWork Inc. (WEWKQ), Bed Bath & Beyond Inc. (BBBY)
Private Companies:
Key People: David Trainer (CEO of New Constructs), Cole Smead (CEO of Smead Capital Management)

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Factuality Level: 3
Justification: The article provides some factual information about WeWork’s stock performance and bankruptcy filing. However, it includes unnecessary background information about Bed Bath & Beyond and unrelated quotes from individuals. The article also includes some biased language and opinions presented as facts.

Noise Level: 3
Justification: The article provides relevant information about WeWork’s stock performance and bankruptcy filing. It includes quotes from experts and highlights the risks associated with investing in unprofitable companies. However, it contains some filler content, such as the mention of Bed Bath & Beyond’s stock performance, which is unrelated to the main topic.

Financial Relevance: Yes
Financial Markets Impacted: WeWork Inc.

Presence of Extreme Event: No
Nature of Extreme Event: No
Impact Rating of the Extreme Event: No
Justification: The article discusses the decline in shares of WeWork Inc. after the company filed for Chapter 11 bankruptcy protection. While this event has financial implications for the company, it does not describe an extreme event.

Reported publicly: www.marketwatch.com