WeOut

WeWork CEO Adam Neumann steps down to save the IPO

Wednesday, September 25, 2019 by Robinhood Snacks | Disclosures
_CEO Adam Neumann relishing his last day on the WeJob_

CEO Adam Neumann relishing his last day on the WeJob

There's no "We" in Adam... Since WeWork filed to IPO last month, it's become a Wall Street punchline: Its S-1 IPO filing paperwork was super cagey ("Our mission is to elevate the world's consciousness") and its new name ("We Company") led to some pronoun jokes. On Wednesday, co-founder/CEO Adam Neumann demoted himself to eliminate the distraction he'd become:

  • Title: He's out as CEO — that'll be replaced with "Non-Executive Chairman of the Board" on his LinkedIn (2 other execs will take over as co-CEOs).
  • Power: Neumann had engineered himself majority voting power — each of his shares got 20 votes on corporate decisions. 20. He downgraded that to 3 votes per share.

Tell us about a time when you... did something reckless. Adam can. Just last week, the Wall Street Journal profiled his brilliance and craziness. That got investors even nervous-er about investing in Adam's hugely unprofitable co-working real estate company. Here are the low-light highlights:

  • Adam had goals to never die, to become Earth's 1st trillionaire, and to be elected president of the world (more here).
  • He stashed weed in a private jet he took to Israel, complicating the flight home.
  • In 2016, he fired 7% of WeWork — then he passed around top-shelf tequila shots and hired Run DMC to play It's Tricky.
  • And Softbank, the top Venture Capital firm invested in WeWork, wanted him to be "even crazier."
THE TAKEAWAY

Ousting Uber CEO Travis Kalanick didn't solve all of Uber's problems... and this won't solve all of WeWork's. The IPO was already delayed because of concerns about Adam's conflicts of interest (he trademarked the name "We" and then personally sold it to WeWork to use for $6M). Now the Adam liability is gone, but these problems aren't:

  • WeWork just lost the visionary leader who built it from nothing to a real estate beast.
  • Its underlying business still lost $1.6B last year, and it's reportedly considering firing 1/3 of its employees to reassure investors.