Adam Neumann was a key player in WeWork’s meteoric rise and dramatic descent into Chapter 11 bankruptcy protection on Monday.
The former CEO of WeWork established the business in 2010 and, primarily by sheer force of personality, built a real estate conglomerate that peaked in January 2019 at a valuation of $47 billion. Merely valued at $45 million, WeWork filed for bankruptcy protection.
In a statement to CNBC, Neumann said, “As the co-founder of WeWork who spent a decade building the business with an amazing team of mission-driven people, the company’s anticipated bankruptcy filing is disappointing.” “Since 2019, I have found it difficult to stand by and watch as WeWork has squandered an opportunity to capitalize on a product that is more relevant than ever.” I think that WeWork can effectively emerge from a reorganization if the correct people and strategy are in place.
Company’s IPO Filing:
After critics uncovered dubious self-dealings in the company’s IPO filing—such as selling the trademark to the word “We” for $6 million in stock, which he would subsequently return—Neumann resigned as CEO in September 2019.
Around the same time, reports surfaced about the company’s hard-partying culture and unconventional managerial style. Under inquiry, the company withdrew its IPO, disappointing investors who had anticipated enormous returns. In contrast to several entrepreneurs whose wealth has diminished in tandem with their business’s success, Neumann, who is 44 years old, most certainly still has a substantial net worth.
Much of the wealth was amassed following Neumann’s departure from the company, as it prepared for another IPO, this time through a special purpose acquisition company.
WeWork Files for Bankruptcy: How We Got Here
SoftBank allegedly paid Neumann $480 million in 2021 for half of his remaining WeWork stake as part of the SPAC process. The former CEO filed a lawsuit after the financial behemoth first tried to back out of purchasing Neumann’s whole $1 billion share. According to reports, Neumann also received an additional $185 million as payment for a non-compete agreement and an additional $106 million as settlement. Overall, it is believed that Neumann made over $770 million in cash from the 2021 SPAC process alone, despite having been ousted from a management position years prior.
When WeWork launched in 2021, Bloomberg stated that Neumann still held a $722 million interest in the business. Those shares are worthless now that the bankruptcy has been filed, though it’s unclear how many, if any, he still owns.
