WeWork Inc.

WeWork (NYSE: WE) is a global leader in the flexible workspace segment. The company provides workspaces for technology sector startups and services for other initiatives. WeWork specializes in creating collaborative environments through both online and offline methods. Its sources of income include membership fees adjusted for discounts, and service fees. Additionally, the company earns commissions from various services it provides.

Recent Financial and Business Updates:

• Completion of reverse stock split:
  • WeWork stated that its previously announced 1-for-40 reverse stock split has been completed for its outstanding shares of Class A Common Stock and Class C Common Stock.
  • The Class A Common Stock will trade under the symbol “WE”.
  • The primary purpose of implementing the reverse stock split is to boost the Company's per-share trading value and meet the minimum closing price requirement of USD 1.00 per share, which is necessary to remain listed on the New York Stock Exchange.
  • After the reverse stock split, each grouping of 40 shares of WeWork Common Stock that are currently in circulation will automatically consolidate into a single share of WeWork Common Stock.
• Second Quarter Income Statement Review:
  • The consolidated revenue for Q2 2023 was USD844 million, which was 4% higher on a year-on-year basis.
  • WeWork reported a net loss of USD397 million, which marked an improvement of USD238 million from the previous corresponding period.
  • The company’s adjusted EBITDA was negative USD36 million, which marked an increase of USD98 million on a year-on-year basis.
  • The total physical occupancy was 72% by the end of Q2 2023, which marked a 70% increase year-on-year.
  • The average revenue per physical member was USD502 in Q2 2023, a year-on-year increase of 4%.
  • The company reported basic and diluted EPS of negative USD0.21 in Q2 2023, as compared to negative USD0.76 in Q2 2022.
• Six-month period ended June 30, 2023, Income Statement Review:
  • The company reported consolidated revenue of USD1.69 billion in the six months ended June 30, 2023, compared to USD1.58 billion in the six-months ended June 30, 2022.
  • The net loss for the six months ended June 30, 2023, was negative USD696 million, as compared to negative USD1.139 billion the previous corresponding period.
  • The adjusted EBITDA for the six months ended June 30, 2023, was negative USD65 million.
• Balance Sheet Review:
  • WeWork reported total assets of USD15.063 billion as on June 30, 2023.
  • WeWork’s total liabilities were USD18.656 billion as on June 30, 2023.

Technical Observation (on the daily chart)

Presently, the stock has corrected by approximately 97.57% since reaching its highest point in the past 52 weeks, which WE achieved on November 15, 2022. The Relative Strength Index (RSI) over a 14-day period stands at 37.34, recovering from oversold zone with expectations of some consolidation or a short-term upward momentum. The current price is below both 21-period SMA as well as 50-period SMA, with both acting as a resistance in case the price recovers.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘SPECULATIVE BUY’ rating has been given to WeWork (NYSE: WE) at its current price of USD3.05 as on September 27, 2023, at 07:49 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is September 27, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

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