WeWork (NYSE:WE) experienced a sharp decline in its stock value, plunging over 35% in premarket trading on Wednesday. This drastic drop followed reports in the media that the flexible workspace provider was contemplating filing for bankruptcy as early as the upcoming week.

The New York-based company, grappling with a substantial debt burden and consistent losses for several years, was once privately valued at a staggering $47 billion. However, its market capitalization has dwindled to a mere $121 million.

This potential bankruptcy filing represents the latest in a series of setbacks for WeWork, a company backed by SoftBank. Its initial public offering (IPO) plans fell apart in 2019 amid doubts about its business model, which involved securing long-term leases and then subletting the spaces on a short-term basis. WeWork eventually went public in 2021 at a significantly reduced valuation compared to its initial expectations, leaving SoftBank with substantial losses for its investors.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, remarked, “Even before the pandemic, cracks were beginning to show in WeWork’s financials, with substantial losses and high debts. The COVID crisis further exposed the weaknesses in its business model.”

According to reports, WeWork is contemplating filing a Chapter 11 petition in New Jersey, as initially reported by the Wall Street Journal on Tuesday.

In a surprising move, the company announced its decision to withhold the interest payment due on November 1 for its senior notes due in 2025, despite having the necessary funds to meet the payment obligation.

As of the last premarket trading session, WeWork’s stock was valued at $1.45, marking a staggering 96% decline in its value over the course of this year.