Home » Business » WeWork’s Bankruptcy and Adam Neumann’s Wealth: What Happened?

WeWork’s Bankruptcy and Adam Neumann’s Wealth: What Happened?

Editorial, CNBC Indonesia

Tech

Tuesday, 07/11/2023 18:50 WIB

Photo: Adam Neumann, co-founder and CEO of WeWork. (AP/Mark Lennihan/File Photo)

Jakarta, CNBC IndonesiaCo-working space company WeWork has officially filed for bankruptcy. However, WeWork’s bankruptcy is inversely proportional to the fate of its founder Adam Neumann.

Adam Neuman, even though he complied CNBC International, was the central figure behind the rapid growth and collapse of WeWork.

WeWork, which Neumann founded in 2010, was once a startup favored by investors and reached a valuation of US$ 47 billion (Rp. 733 trillion) in 2019. Now, when it filed for bankruptcy, the company’s valuation was “only” US$ 45 million (Rp. 702 billion).

Nemumann resigned in September 2019 after governance problems at WeWorks were exposed during its IPO process. It turns out that the CEO often enriches himself in strange ways, such as giving himself company shares worth US$ 6 million to pay for copyright, said We.

Foto: Wework (REUTERS/Brendan McDermid/File Photo)

Various reports also described Neumann’s unusual management style, including a culture of debauchery. Ultimately, WeWork’s IPO failed.

However, Neumann is not like other startup founders whose wealth evaporates along with the valuation of the company they founded. This 44 year old man is actually accumulating wealth ahead of WeWork’s transformation into a public company.

After failing at its IPO, WeWork underwent a merger process with a SPAC, which is a shell company established as an entry point for companies that want to go public.

It was very difficult for me, only being able to watch from afar, WeWork’s failure to take advantage of a product that is actually very relevant today. Adam Neumann

As part of the merger, SoftBank reportedly gave Neumann US$ 480 million (around Rp. 7.5 trillion) to buy half of all his shares. Neumann received this payment after he took SoftBank to court because the startup investor canceled plans to buy all of Neumann’s WeWork shares at a price of US$ 1 billion (Rp. 15.62 trillion).

Neumann also received US$ 185 million (Rp. 2.9 trillion) as part of a non-competition clause (which prohibits Neumann from negotiating with other potential buyers) and US$ 106 million (Rp. 1.6 trillion) as part of an outside lawsuit settlement. court.

In total, despite being kicked out of WeWork years earlier, Nuemann earned US$ 770 million (Rp. 12 trillion) during the merger process.

Apart from that, Neumann still has shares in WeWork whose value is estimated to reach US$ 722 (Rp. 11.29 trillion) when WeWork goes public.

After WeWork went bankrupt, the remaining shares were worth zero. However, it is possible that Neumann has already sold his remaining WeWork shares.

“As a founder of WeWork who spent a decade building a business with extraordinary people, the news of this bankruptcy is disappointing. It is very difficult for me, only to be able to watch from afar, WeWork’s failure to capitalize on a product that is so relevant today. I believe, “With the right team and strategy, a reorganization can make WeWork successful again,” Neumann said in a statement to CNBC International.

Photo: Adam Neumann (Doc. twitter @WeWorkAdam)

Now, Neumann is busy with his new startup which is also involved in the real estate sector, called Flow. The company, which has reached a valuation of US$ 1 billion, has the ambition to “find solutions to inequality in the home rental market by creating a community atmosphere and helping renters build assets through your home.”

Flow reportedly now has 3,000 residential units in various cities in the United States. According to CNBC International, Flow’s business model remains unclear but appears to be a replica of the co-working business model that WeWork pioneered in the residential market.

In an interview with CNBC International, Neumann stated that Flow is another form of a similar story [dengan WeWork]. “When people live in a community, when people live together, when there are differences, there is always common ground,” Neumann said.

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2023-11-07 11:50:00
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