WeWork's CEO Shuffle 'Disruptive,' Analyst Says: Don't Expect Cash Flow Until 2025

Shares of WeWork Inc WE declined on the heels of the shared workspace company's announcement that Sandeep Mathrani was resigning, effective May 26.

Board member David Tolley will serve as interim CEO until the company names a successor.

Mizuho Securities called the change a “disruptive” event, especially given the ongoing macro headwinds.

Check out other analyst stock ratings.

The Analyst: Vikram Malhotra downgraded the rating for WeWork from Buy to Neutral, while slashing the price target from $1.75 to 35 cents.

The Thesis: The macro environment has worsened over the past couple of months, with more corporate layoffs and bankruptcies, Malhotra explained.

“We now see our base case business assumptions, specifically occupancy target of 76% by YE23 and 78% by YE24, as unachievable, likely leading to higher cash burn and eventually driving the need for outside capital,” the analyst wrote.

“We do not see the company FCF being positive until FY25,” he added.

WE Price Action: Shares of WeWork declined by 1.43% to 34 cents in the premarket on Wednesday.

Next: WeWork Receives Listing Non-Compliance Notice From NYSE

Image courtesy of WeWork