Adam Neumann, co-founder and former chief govt officer of WeWork.
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WeWork’s dizzying rise and protracted fall into Chapter 11 chapter safety Monday largely hinged on one man: Adam Neumann.
The former WeWork CEO based the corporate in 2010 and largely by the pressure of his persona created an actual property juggernaut that was value $47 billion at its January 2019 peak. By the time it filed for chapter safety, WeWork was value a mere $45 million.
“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,” Neumann stated in a press release to CNBC. “It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before. I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”
Neumann stepped down as CEO in Sept. 2019 after critics observed questionable self-dealings within the firm’s IPO submitting, like promoting the trademark to the phrase “We” for $6 million in inventory (which he would later return). Reports across the similar time described an unorthodox administration type and a hard-partying setting on the firm. The firm withdrew its IPO underneath scrutiny, irritating traders who’d hoped for outsized returns.
Unlike many founders who’ve seen their web value evaporate alongside their firm’s fortunes, the 44-year-old Neumann seemingly stays a rich man.
A sizeable portion of that wealth was collected after Neumann stepped away from the corporate, because it girded up as soon as once more for a public providing, this time by way of a particular goal acquisition firm.
As a part of that SPAC course of, SoftBank reportedly paid Neumann a reported $480 million for half of his remaining stake in WeWork in 2021. The funding large had initially tried to again out of shopping for Neumann’s full stake, valued at $1 billion, prompting a swimsuit from the previous CEO.
Neumann additionally reportedly collected one other $185 million as a part of a non-compete settlement and an additional $106 million as a part of a settlement. In all, regardless of being faraway from a administration position years earlier, Neumann reportedly collected round $770 million in money from the 2021 SPAC course of alone.
Neumann additionally nonetheless retained a stake within the firm valued at round $722 million when WeWork debuted in 2021, Bloomberg reported. Following the chapter submitting, these shares are nugatory, though it isn’t identified what number of — if any — he nonetheless holds.
As the corporate’s market cap spiraled downward, Neumann launched into one other real-estate tech enterprise, referred to as Flow. Valued at $1 billion and flush with a $350 million examine from enterprise capital agency Andreesen Horowitz, the corporate promised to unravel inequities within the rental-housing market by creating a way of neighborhood and serving to renters construct fairness of their houses.
Flow has reportedly constructed up a portfolio of three,000 items in main metropolitan areas, with Neumann describing the corporate’s method as a “technology-first” enterprise. At the floor stage, it will appear to be a continuation of Neumann’s method with WeWork, tailored for the residential market, with the potential for a monetary providers arm as properly. Flow’s web site lacks additional element, though the corporate is hiring for a number of positions throughout the U.S.
In an October look on CNBC, Neumann emphasised how his upbringing formed his enterprise ventures. “The WeWork journey was an amazing one,” Neumann stated.
“Flow is another iteration of the same story, which is: when people live in community, when people live together, when people obviously have differences,” Neumann continued, “there’s always a common ground.”
Source: www.cnbc.com”