WeWork Inc (NYSE:WE), the co-office space start-up that was once valued at nearly $50 billion (more than the market cap of Ford), will reportedly file for bankruptcy next week. The stock is now down more than 99% from its listing price but remains above $1 a share.

Shares of companies that are on the verge of bankruptcy can sometimes experience a so-called ‘dead-cat bounce’ on the way out.

Recall how, earlier this year, Bed Bath & Beyond’s stock moved higher despite announcing it would officially file for Chapter 11 bankruptcy.

Some investors may think that the zombie company will be acquired for parts by a larger corporation. Other traders may be looking for some sort of ‘dead-cat bounce’ or short squeeze.

But, so far, there’s been nothing to reward people buying WeWork’s stock on the way down. The stock is currently trading down more than 50% in the last few days after news of its planned bankruptcy broke.

WeWork’s rosy $48-billion valuation is a perfect representation of the zero-interest-rate environment that led to a clear bubble in private valuations. At the time, private investors loved the startup and pumped millions of dollars into the company. However, WeWork’s open and fun work environment headed by the eccentric founder Adam Neumann turned awry. He even had to put a limit on the number of beers employees were able to drink from the company keg. On top of clear company culture issues, the COVID-19 pandemic and subsequent work-from-home push limited the demand for public office spaces like the ones that WeWork offers to users.

Someone could come in and buy WeWork for parts. But until then, it’s unlikely that the stock sees any sort of meaningful bounce, outside small rallies that should not last.

WeWork Expected To File For Bankruptcy Next Week: Could The Stock See One More Pop?