WeWork (NYSE:WE), which provides office space and support to its customers, has been on a wild ride while many investors wait for the company to file for bankruptcy. WE stock gained nearly 90% yesterday and is trending on social media again today as the shares are sinking 20% in early market trading. What’s more, the name appears to have become a popular target for short sellers as the cost to borrow its shares almost tripled yesterday versus the previous day.
Also noteworthy is that the company has indicated that it’s taking steps in an effort to avoid bankruptcy.
The Cost of Borrowing Shares and WeWork’s Recent Moves
The annualized interest rate paid by the short sellers of WE stock jumped to 155.71% at the end of Sept. 12 from 52.58% at the market close on Sept. 11. And on Sept. 8, short sellers were paying a relatively low rate of 25.26%. The data indicates that, in recent days, the number of individuals and institutions looking to short the troubled company has soared.
Meanwhile, WE CEO David Tolley on Sept. 6 wrote in a public letter that the company was looking “to renegotiate nearly all (its) leases.” The CEO noted that the company intends to terminate a number of its leases but will look “to reinvest in (its) strongest assets.”
Tolley suggested that the changes to WeWork’s leases would enable it to stay in business for many more years.
WE Stock: Other Important Data
On Sept. 8, WE stock fell to a split-adjusted record low of $2.65. At the end of last quarter, the company’s cash and equivalents were worth $205 million, versus $287 million at the end of 2022.
WE stock is down about 90% year-to-date.
On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.