Already troubled office-sharing space WeWork is among the worst hit from the coronavirus.
As customers work from home, SoftBank revealed that it experienced a loss of $8.4 billion for the most recent fiscal year, $1.4 billion more than previously expected. That comes as SoftBank plans to write down its WeWork stake held outside the Vision Fund portfolio by $6.6 billion for the year.
“Every writedown takes WeWork’s carrying value closer to reality. Clearly the value is zero,” said Kirk Boodry, an analyst at Redex Holdings told Reuters.
It doesn’t look good for WeWork now—and into future quarters.
Surviving and operating during the epidemic will take a pivot for offices of all kinds. Investors are no longer waiting solely on a vaccine but looking for tech solutions around long-term social distancing. WeWork pitched itself as a tech company in IPO filings. If it plans to survive, it—along with other offices—will need to tap into contact-tracing platforms and population management software, even for meetings.
That said, shrinkage seems inevitable. Even with a vaccine, the company’s model of packing in as many people as efficiently possible into a workspace isn’t an attractive one.
The company, now valued at roughly $272 million, uses AI to recognize objects like a stop sign via the car’s camera—then alert drivers via smartphone. In the case of an insurance claim, customers can also nix the time-consuming paperwork process by giving insurers access to video of the accident and info such as its time, date, and location.
The company is operating in an abnormal environment right now. Car insurers aren’t so worried about accidents at the moment—the coronavirus has razed travel of all kinds, and car insurance claims along with it. But when travel restrictions begin to lift, analysts tell Term Sheet, car travel is expected to be the first to come back.
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