How WeWork Rebounded After Its Controversial IPO
Co-founder Adam Neumann stepped down in 2019 after questions arose about the company’s financial sustainability.
The new Apple TV+ miniseries WeCrashed dramatizes the rise and fall of the real estate start-up WeWork, which made its name creating shared co-working spaces. The show is based on the popular Wondery podcast WeCrashed: The Rise and Fall of WeWork and centers around the love story between WeWork co-founder Adam Neumann and his wife Rebekah. Despite the chaos, mayhem, and horrible business decision-making portrayed in the series, WeWork as a company still very much exists — though, unsurprisingly, under new leadership.
In September 2019, Adam Neumann was pressured into resigning from his position as WeWork’s CEO after mandatory documents filed in their disastrous initial attempt at an IPO the previous month began to reveal some of his more suspect leadership decisions and bring into question the financial sustainability of the company. This, coupled with numerous accusations emerging about Neumann’s inappropriate behavior at work — such as hotboxing the company’s private jet, retaliating against pregnant employees, and creating a toxic, cult-like work environment — led to him stepping down. “The [$47 billion] valuation made us feel like we were right, which made me feel that whatever style I was leading at was a correct style at the time, so I do think it affected [the company culture],” Neumann told CNBC in November 2021 while discussing WeWork’s failed initial IPO. “I also think the chase [for success]... maybe it went to my head. I do think at some point it did.”
Of course, Neumann didn’t leave with nothing. Softbank, the Japanese technology investment management company that had formerly been one of WeWork’s biggest advocates and investors, offered Neumann $1.7 billion to step down from his role as chairman of the WeWork board of investors. According to Forbes, Neumann was also able to hang on to nearly 20 million WeWork Partnerships Profits Interest Units and, through an entity he controls, has retained an estimated ownership stake of about 7% despite no longer having any role in the business. He took an initial financial hit when he was forced out of the company, but regained his billionaire status in October 2021 when WeWork merged with BowX Acquisition Corp. Forbes estimates that Neumann has nearly $700 million still tied up in WeWork, with the rest of his fortune coming from his separation agreement and money he made selling WeWork shares over the years. WeWork’s other co-founder, Miguel McKelvey, announced he was leaving the company in June 2020 — less than a year after Neumann was pushed out.
Although WeWork — which Softbank now owns the majority stake in — looked like it was in dire straits after Neumann’s departure and the botched IPO, the company says it has recently seen a resurgence in popularity thanks to workers’ increasing desire for flexible workspaces as the economy attempts to rebound from the coronavirus pandemic. WeWork, which was once valued at $47 billion, was worth an estimated $9 billion when it finally went public in October 2021 under current CEO Sandeep Mathrani.
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