The odds of WeWork co-founder and CEO Adam Neumann becoming “the world’s first trillionaire” maybe about to take another major hit.
In what appears to be the latest attempt to salvage the farce that is the WeWork IPO (and the massive hole it will leave in Masayoshi Son’s balance sheet and credibility), The Wall Street Journal reports that a group of WeWork board members, with ties to Softbank officials, is pushing for the ouster of Adam Neumann as chief executive.
Citing the eponymous ‘people familiar with the matter’, The Journal writes that the board is expected to meet as soon as this week and potentially consider a proposal for Mr. Neumann to become We’s non-executive chairman, blaming another recent WSJ article that exposed Mr. Neumann’s eccentric behavior and drug use (Neumann had taken marijuana on a flight from New York to Israel, prompting the jet’s owner to recall the plane).
As WSJ notes, any attempted coup is a gamble: Mr. Neumann still has allies among the directors and the ability to fire the entire board thanks to shares he controls that carry extra votes. But SoftBank, which has invested more than $9 billion into the company and is represented on the board, has considerable influence too, and We needs the Japanese conglomerate to continue pumping in cash.
There are seven We directors (including Mr. Neumann) and while the Journal discusses the ‘bloc’ above, it is unaware of the number aligned with, or against, the ‘eccentric’ trillionaire-to-be.
Still, while Son may hope the ouster of We’s CEO will allow them to ‘pull an Uber’ – IPOing after the ouster of CEO Travis Kalanick was blame-scaped for all that was wrong with the company, we suspect We has bigger problems…
WeWork vs IWG
We: loss $1.9BN
IWG: profit $0.5BN
We: 29 countries; 528 locations
IWG: 120 countries; 3000 locations
We: valuation $10BN – $47BN
IWG: $3.7BN valuation
— zerohedge (@zerohedge) September 22, 2019
As Scott Galloway noted earlier: “math!” before forecasting (somewhat prophetically already) the following:
In the next 30 days, a series of explosive investigative journalism pieces will document breathtaking malfeasance at We.
In the next 60 days, a state attorney general, SEC, or other regulatory body will launch a formal investigations into We.
Over the next 12 months, SoftBank’s Vision Fund will be shuttered.
As CNBC’s Deirdre Bosa notes, Neumann commented on his and Masa’s relationship at the start of 2019:
“there’s something beautiful about Masa’s and my relationship is how we communicate… I’m pleased that he chose to invest in us”
How quickly things can change (when one loses over $30 billion in potential value).