WeWork’s co-founder Adam Neumann’s public fall from grace is set to reach a new low. After being forced to step down as the chief executive in September by the company’s board, a new proposal from SoftBank might see him lose his place as the chairman of the parent company WeCompany. Neumann relinquished his position following his failure to lead the company to its IPO. At the start of the year, the company was valued at $47 billion, with many financial advisers suggesting it would do much better after the stock hits the market. However, by the time of the scheduled IPO, the company’s valuation was $15 billion. Neumann’s failure forced investors to scrutinize his managerial style and lavish lifestyle more intently.
The investigations revealed WeWork’s massive losses and the need for more structure. Neumann’s charm could not compensate for his impulsiveness and penchant for partying. Other improprieties included him leasing his own properties to the company, which is the biggest commercial real estate owner in Manhattan.
With the IPO now dead, SoftBank has taken the opportunity to make a $10 billion offer for the company. The Japanese conglomerate has already invested $10.6 billion in WeWork and owns 30 percent of the company. If investors accept the offer, SoftBank will own 60-80% of the WeWork, including part of Neumann’s stocks. Neumann was reported by Forbes to be worth $4.1 billion in March, but has now been delisted as a billionaire. SoftBank will replace Neumann as the chairman of WeCompany with its own chief operating officer, Marcelo Claure. Neumann will be retained as an adviser to the company. His only chance of survival is if the board votes to accept a financing proposal from JPMorgan Chase & Co. JPMorgan has been unable to find banks and investors to support it.