WeWork's IPO saga continues this week as news broke that investors, including its largest shareholder, are in favor of ousting the founder and CEO.
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WeWork's IPO saga continues this week as news broke that investors, including its largest shareholder, are in favor of ousting the founder and CEO. CNBC's Alex Sherman reported over the weekend that SoftBank Group's Masayoshi Son is on board with removing WeWork's Adam Neumann. The real estate start-up's directors plan to meet as soon as this week to propose Neumann step down, Sherman writes.
The news adds to WeWork's list of IPO woes, including trouble getting a valuation of more than $20 billion with potential public investors. The public market estimates are a far cry from WeWork's $47 billion valuation after SoftBank invested $5 billion in January. The company's public filing showed a $1.9 billion loss last year, and analysts expect that WeWork is on pace to run through its remaining cash on hand at some point next year. Public market investors balked, and the proposed price of the IPO dropped to as little as $15 billion.  Last week was an especially tough one. The company postponed its IPO roadshow, and an expose on Neumann in The Wall Street Journal revealed he had once been forced to reschedule a private plane trip after the crew found marijuana. The CEO also showed interest in becoming Israel's prime minister and the president of the world, living forever, and becoming the world's first trillionaire, according to the Journal. The falling out between Neumann and Masa Son didn't happen overnight, Sherman writes. SoftBank has been frustrated with Neumann's tendency to brush off advice, from pushing forward with an IPO to using phrases in WeWork's S-1 such as "elevate the world's consciousness" — a phrase SoftBank urged Neumann to eliminate. There are other instances of Neumann ignoring SoftBank, Sherman says, citing two people familiar with the matter. Those close to WeWork say the tension is more about SoftBank's desire to keep WeWork private. Still, Sherman says at least some members of the WeWork board that aren't affiliated with SoftBank are aligned with Neumann to keep him as CEO. |
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