WeWork short-sellers have made a hefty $440 million in profits over the past year.
The big gains come on the back of a 96% plunge in the real-estate company’s stock in the past 12 months.
The abrupt departure of CEO Sandeep Mathrani has also weighed heavily on WeWork’s share price.
Traders betting against real-estate company WeWork have made millions in profits over the past year.
Short-sellers raked in paper profits of about $440 million for the year through Wednesday’s close, S3 Partners data shows, cited by Bloomberg.
Short selling, also known as shorting, refers to the practice of investors borrowing stock to sell it with the aim of buying it back later at a lower price and returning it to the lender, pocketing a profit. Traders engage in short selling when they expect a company’s stock price to decline, and want to make money if that happens.
The hefty gains for traders come on the back of a 96% plunge in WeWork’s share prices over the past 12 months. The stock saw a 25% single-day slide on Wednesday, following news of CEO Sandeep Mathrani’s departure. At last close on Thursday, the shares were trading at $0.26 a piece.
The company, co-founded by the controversial Adam Neumann, will be temporarily spearheaded by WeWork board member David Tolley.
WeWork has endured trouble since it went public in August 2019. In just one month, the coworking company significantly slashed its valuation down from $47 billion to $7 billion, removed Neumann as CEO, and indefinitely delayed its IPO.
Last month, WeWork was forced to release an embarrassing press release warning that it was in danger of being delisted from the NYSE because the stock had traded below $1 for so long.
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