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WeWork will swap 40 of its existing shares for a single new one to bring its share price back above the $1 threshold required to remain listed on the New York Stock Exchange.

Shares of the US office space company closed about 11 per cent lower at 14 cents on Friday, having shed 99 per cent of their value from a peak of $13.71 in April 2021. The company, which SoftBank once valued at $47bn, has a market value of less than $300mn.

While WeWork’s decision to push ahead with the reverse stock split should address the issue around compliance with the NYSE’s continued listing rule, the company still has bigger challenges to deal with. The group warned earlier this month that it faced “substantial doubt” about its ability to continue as a going concern.

WeWork said in a statement on Friday it did not expect the reverse stock split “to impact its current or future business operations”. The move will take effect after the market closes on September 1.

The company’s share price first closed under $1 on March 10, and — with the exception of one session later that month — has remained under that threshold ever since, according to Refinitiv data.

WeWork received a notice from the NYSE in April saying the group’s share price was not in compliance with the exchange’s listing requirement that the price must remain above $1 over 30 days of consecutive trading. It had six months to remedy the violation.

The company subsequently decided to pursue a reverse stock split, with shareholders in June voting to approve the move. At the time, the company proposed conducting the procedure at a ratio in the range of 1-for-10 to 1-for-40.

WeWork attempted to go public via an initial public offering in 2019, but its failure to do so led to the ousting of co-founder Adam Neumann. The company eventually listed on Wall Street in 2021 by merging with a blank-cheque company in a $9bn deal.

The company has been overhauling its cash-burning business since its failed IPO attempt, having exited or amended almost 600 leases, cutting nearly $13bn from future lease commitments. Its viability depended on further restructuring and a search for more capital over the next 12 months, the company said earlier this month.

WeWork’s second-quarter results fell short of its guidance just three months after a restructuring that slashed its debt by approximately $1.2bn. At the end of June, it had $690mn of liquidity, including $205mn in cash.

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