Via BigCharts:
That late October move looks a lot like an old-school Vancouver pump-n-dump.
And from MarketWatch, December 1/2:
WeWork disclosed Wednesday that it will restate financials provided in the process of going public and admitted a material weakness in control of its financial reporting, sending shares down more than 5% in after-hours trading.
WeWork WE, -0.71%, which rents out co-working space, revealed in a filing with the Securities and Exchange Commission that it will have to file reworked financial information because it failed to properly account for some equity as it went public through a special-purpose acquisition company, or SPAC, less than two months ago.
Many companies that have gone public through a SPAC have been forced to restate their financial information in a similar manner after the SEC clarified rules for SPACs, including big-name SPAC targets like Virgin Galactic Holdings Inc. SPCE, +1.48% and DraftKings Inc. DKNG, +0.19%
WeWork went public long after those companies, and after they had restated their financials. The stock began trading as WeWork in October after combining with BowX Acquisition Corp., a SPAC that went public in August 2020. When the SPAC went public, it did not properly account for some equity, and the problem was not fixed in the run-up to the merger.
“The Company had previously classified a portion of the Public Shares in permanent equity,” WeWork explained in the filing. “Upon further evaluation, the Company determined that the Public Shares include certain redemption features not solely within the Company’s control that, under ASC 480-10-S99, require such shares to be classified as temporary equity in their entirety.”....
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We've been down this road before, thanks to former Wall Street Journal blogmeister Matt Phillips.
First posted December 20, 2012:
"Auditor: 'Material Weaknesses' at Bailey Bros. Building and Loan"Uh oh.
Via Quartz:
Board of Directors of the Bailey Bros. Building & Loan Association
We have audited the Bailey Bros. Building & Loan Association (the Building & Loan) internal controls and financial reporting as of [Sept.. 30, 1945]. The management of the Building & Loan is responsible for maintaining such controls, along with assessing their effectiveness and conformity with prevailing accounting and financial standards. Our responsibility is merely to express an opinion.
As such, we are compelled to inform you that we have discovered several instances of material weaknesses and deficiencies which may put shareholders and indeed the entire community of Bedford Falls at significant risk. Frankly, the Bailey Bros. Building & Loan Assoc. is a terribly run financial institution. We’ve never seen anything like it....MORE
Much of our concern is centered on the fitness of Vice President William Bailey for the day-to-day management of the firm’s cash accounts. We made several attempts to interview Mr. Bailey as part of our audit, including arranging no less than six separate appointments at which he failed to appear. It was only after arriving unannounced at the Building & Loan’s downtown Bedford Falls headquarters on Nov. 21, that we were able to meet with Mr. Bailey. Our visit did little to allay our concerns.
Upon entering we witnessed Mr. Bailey drinking an unknown substance—we believe it to have been liquor—from a small flask. And when we questioned him about the several missed appearances, he grew visibly distraught and confused, repeatedly showing us a series of strings knotted around his fingers. Perhaps most distressing was the presence of wildlife—we witnessed a squirrel, crow and owl—in Mr. Bailey’s office, which is both a potential health hazard and liability for the Building & Loan.
Let us be blunt. “Uncle Billy,” as Mr. Bailey is known, exhibits clear symptoms of early stage dementia....
