WeWork co-founder Adam Neumann said he was “disappointed” the company was unable to stay relevant. Shahar Azran – Getty Images
Billionaire Adam Neumann watches from the bench as the office “community” empire he built collapses. WeWork filed for bankruptcy yesterday amid filings that show it is $19 billion in debt — leaving the future of many of its 777 locations in doubt.
Neumann started the company in 2010. Co-founded in 2010 with Miguel McKelvey, the pair enjoy the title of trailblazers, shaking up the commercial real estate sector with the idea of creating hip workplace memberships for office spaces.
However, despite the company’s growth, investors grew increasingly tired of Newman’s antics, and the former CEO stepped down in 2019.
The man, who is now worth $2.2 billion, said it is difficult to see his project on the ground; This pours salt into the wounds of investors and may be held responsible for the ultimate demise of the company.
In a statement released earlier this week, Neumann appeared to take a shot at his successors at WeWork: “It has been challenging for me to watch from the sidelines in 2019 as WeWork fails to capitalize on the most valuable product today. More than ever.
“With the right strategy and reorganization of the team, I believe that WeWork will be able to emerge successfully.”
In fairness to the current WeWork boss, he hasn’t had that much time to interact with the company. David Tolley has been named chief executive less than a month after serving as interim leader since May.
At the time, Tolley said he was taking steps to grow the business, adding, “I strongly believe we’re on the right track.”
A little over three weeks later, Neumann called WeWork’s bankruptcy — which included its US and Canadian operations — “sad” but credited the business with an “amazing team of people on a mission.”
WeWork did not immediately respond. Fortune Ask for feedback outside of normal business hours.
The road to bankruptcy for WeWork
New York-based WeWork has attracted the attention of Silicon Valley and Wall Street as it attempts to leapfrog from tycoon to market power with an IPO in 2019.
However, the SPAC was wrong when its pre-listing S-1 filing showed annual losses of $1.9 billion before going public.
Investors also spoke openly about the sustainability of the business.
SoftBank, WeWork’s largest foreign investor, has asked the business to drop its plans to float again.
A year later, SoftBank CEO Masayoshi Son publicly criticized the business, saying it was “stupid” to greenlight the company’s multibillion-dollar investment in the office-stock company.
Son also lowered the value of WeWork, which was valued at $47 billion. In the year In March 2020, Son valued the business at just $2.9 billion, a portion of his company’s investment in the venture.
Of course, WeWork’s situation in 2020 is even worse than its disastrous IPO attempt.
Neumann left the business following a shocking revelation by the Wall Street Journal about its management, a nearly $6 billion battle over Neumann’s trademark “we” and thousands of layoffs.
The biggest thing happening at WeWork was unpredictable: a global pandemic that required many workers to work from home.
Lockdowns around the world have left the company’s spaces empty, but by 2022—and despite the back-to-office battle—occupancy has returned to 72% of pre-pandemic occupancy rates.
The company is expected to go public in October 2021, valued at $9 billion. Over the past year, WeWork’s stock price has plummeted, dropping more than 99 percent to 84 cents.
Newman launched Flow, which it describes as “a residential consumer-facing real estate company.”
The proposal would limit competition with WeWork, which Neumann said in July that Flow would “compete or partner” with its former company.