The New York Stock Exchange has suspended trading in WeWork warrants due to "abnormally low" trading price levels.
In a Securities and Exchange Commission filing WeWork confirmed the NYSE had begun proceedings to delist its warrants and that it would not appeal.
Warrants are common in special purpose acquisition company IPOs, such as the one WeWork employed to list via a merger with SPAC BowX in October 2021.
WeWork’s warrants are legacy BowX warrants that were issued to provide incentives for investors who initially participated in the IPO and give the holder the right to purchase stock at a specific price. The strike price is $11.50 per share, a level WeWork has been trading beneath for some time.
In a statement supplied to CoStar News the under-pressure group said: “We do not expect the delisting of WeWork’s warrants to have an impact on the company’s stock or business operations. As previously announced, we are laser focused on creating a sustainable business that is well positioned to continue serving our members for the long term.”
The NYSE's announcement will have been expected by WeWork and its investors.
Companies that have taken up the warrants include Allianz Asset Management, Bank of America, Ionic Capital Management, Walleye Capital, LMR Partners, Ancient Art, Marshall Wace, Davidson Kempner Capital Management, Davidson Kempner Partners, Millennium Management and Credit Suisse.
Warrants are not the same as stocks and delisting does not affect WeWork's stock or business operations. But the announcement continues a particularly turbulent month for the group.
In second quarter results released earlier in August, WeWork warned "substantial doubt exists" about its ability to continue as a going concern, putting landlords and tenants at millions of square feet of space on notice that the operator of their space may not be around for much longer.
And last week it confirmed it was pursuing a 1-for-40 reverse stock split as it moves to prevent its common stock shares from being delisted from the NYSE.
WeWork was trading at a near record low of 13 cents a share at close of trading on 22 August. NYSE rules mean it needs to ensure its stock price moves above $1 a share for it to remain on the Exchange.
When WeWork finally listed it was valued at $9 billion, down from the $47 billion valuation that the company and majority shareholder SoftBank had attached to the group at its first failed attempt at listing in 2019. Its market cap at close of business yesterday was $284.76 million.