What happened to WeWork? Learn in this Rise and Fall Story
WeWork Inc. is a provider of coworking spaces, including physical and virtual shared spaces, headquartered in New York City. As of December 31, 2021, the company operated 44.8 million square feet (4,160,000 m2) of space, including 19.8 million square feet (1,840,000 m2) in the United States and Canada, in 756 locations in 38 countries, and had 590,000 members, with a weighted average commitment term of 20 months.
The company gained mainstream media attention in 2019 with its failed initial public offering (IPO) of company stock. The Wall Street Journal noted that upon the release of its public prospectus in August 2019, the company was “besieged with criticism over its governance, business model, and ability to turn a profit”.
In September 2019, following mounting pressure from investors based on disclosures WeWork had made in its S-1 filing for the IPO, company co-founder Adam Neumann resigned from his position as CEO and gave up majority voting control in WeWork.
Amid growing investor concerns over its corporate governance, valuation, and outlook for the business, WeWork formally withdrew its S-1 filing and announced the postponing of its IPO. At that time, the reported public valuation of the company was around US$10 billion, a reduction from the $47 billion valuation it had achieved in January and less than the $12.8 billion it had raised since 2010.
The $47 Billion Disaster of WeWork – Part 1
As of May 2022 the company is traded at a valuation of $5.1 billion. In October 2019, Neumann received close to US$1.7 billion from stakeholder SoftBank for stepping down from WeWork’s board and severing most of his ties to the company. He was retained as a consultant with an annual salary of $46 million.
The New York Times described the company’s failed effort to go public, and its related turmoil, as “an implosion unlike any other in the history of start-ups”, which it attributed to Neumann’s questionable tenure and the easy money previously provided to him by SoftBank, led by Masayoshi Son
WeWork Part 2 – Burning Cash and Legal Fires
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