WeWork witnesses a change of leadership as its CEO Adam Neumann steps down citing ‘best interest’ of the firm. Former chief financial officer and co-president Artie Minson and former vice chairman Sebastian Gunningham become the company’s co-chief executives.
The company which has grown from a one office setting in New York City to having 500 plus locations spanning 29 countries had been valued at $47bn by Softbank recently. As news of an IPO launch became known the expected valuation of the company dipped to as low as $10bn. And the major reasons for the dip were cited to be the alarming influence of the CEO’s inconsistent decision making and habits of hard-partying on the corporate image. Mixing personal finances with those of the company was another concern causing the dip. Investors were not at ease with the prevailing relationship of Neumann with his company.
Against this scenario, Neumann agreed to a change in role alongside his co-founder wife whose role was also cut down. Neumann assented to a reduction in voting powers besides returning company stock of $5.9m held by him for selling the ‘We’ trademark to the company. However, this was not enough to allay investor concerns for the company which had notched a loss of $2bn previous year.
Critics had long declared about the unwarranted high valuation of the company as compared to competitor IWG.
Research analyst Richard Kramer feels that the company’s IPO will not be forthcoming anywhere in the times to come since the future of WeWork lay in its remaining a privately held company. The company would need to face trouble if its IPO would not be forthcoming in the near future.
The idea of WeWork had grown from the subletting of office space renovated by Adam Neumann and his architect partner Miguel McKelvey. This business was sold but it led to the formation of the property company, ‘WeWork’.