The valuation of WeWork has dropped from $47 billion to substantial doubts about its future.

WeWork is struggling to survive in a post-pandemic world.

In announcing its earnings today, the flexible space provider said that “substantial doubt exists about the company’s ability to continue as a going concern.”

WeWork has faced a number of challenges for years now, and with so many companies abandoning office space and more people being able to work remotely, demand for its co-working spaces has steadily declined over time.

WeWork’s going concern warning is a reminder that VC and low-margin business don’t mix

Today, the 13-year-old company announced a net loss of $397 million for the second quarter on revenue of $877 million. While revenue was up 4% year-over-year, WeWork interim CEO David Tolley noted in a statement: “Excess supply in commercial real estate, increasing competition in flexible space and macroeconomic volatility drove higher member churn and softer demand than we anticipated, resulting in a slight decline in memberships.”

As such, WeWork went on to say its ability to continue operating is contingent upon “successful execution of management’s plan to improve liquidity and profitability over the next 12 months.”

Those efforts include cutting rent and tenancy costs via restructuring actions and negotiation of more favorable lease terms; increasing revenue by reducing member churn and increasing new sales; controlling expenses and limiting capital expenditures; and seeking additional capital via issuance of debt or equity securities or asset sales.

WeWork’s stock was down 33% after hours to 13 cents, after closing at 21 cents. By Wednesday morning, it was trading at 14 cents, with a market cap of $300 million. At its prime, WeWork was valued at a staggering $47 billion after raising $1 billion in its SoftBank-led Series H round in January 2019.

Co-founder and then-CEO Adam Neumann notoriously stepped down later that year amid allegations of a toxic combination of arrogance and poor management. WeWork has since been very publicly trying to redeem itself and turn around investor — and public — perception.

TechCrunch reported on some of those efforts to reinvent itself before it went public in October of 2021, but clearly those efforts haven’t panned out as hoped.

WeWork has raised over $22 billion in funding (including debt) from investors such as SoftBank, Insight Partners, BlackRock and Goldman Sachs, among others, according to Crunchbase.

This story was updated post-publication to amend the current market cap.