- Key Investors and Board members of WeWork’s holding company We Company are voicing their opinion to remove Adam Neumann as CEO of WeWork after botching the IPO and mounting losses on the company as per the reports.
- As per the reports of The Wall Street Journal, The board members representing SoftBank which is the largest investor in Company are likely to propose a demotion of Neumann at the board meeting soon.
Key Investors and Board members of WeWork’s holding company We Company are voicing their opinion to remove Adam Neumann as CEO of WeWork after botching the IPO and mounting losses on the company as per the reports.
- As per the reports of The Wall Street Journal, The board members representing SoftBank which is the largest investor in Company are likely to propose a demotion of Neumann at the board meeting soon.
- It is still unclear how many of the company’s seven-member board will take Neumann side but this proposal to sideline him can go against the board members too since the WeWork co-founder holds special voting shares and can dismiss dissident board members.
- The investors and the board members are looking to demote Neumann to interim CEO or make him a non-executive chairman.
- The startup’s decision to delay the Initial Public Offering saw relations between WeWork and SoftBank getting worse.
Recently, Neumann told the staff that he had been humbled by the response from investors to its planned share sale. The Tokyo-based SoftBank and it’s London-based Vision Investment fund had supported WeWork despite the huge losses of the startup, byzantine corporate structure, and Neumann’s unusual influence over the company. The investors are hard to convince now as they have found the eccentric management and extravagant parties of the co-founder. WeWork might have a problem now as it burns loads of cash through its capital reserves in order to facilitate their global expansion.
Source- WeWork
Neumann’s control and influence of WeWork are strikingly similar to that of Uber founder Travis Kalanick. The ex-CEO of Uber resigned in Jue 2017 after facing the opposition of key shareholders due to his aggressive leadership style and scandals that rocked the ride-hailing app. The new chief executive Dara Khorsowshahi took the company public in May 2019 but Uber shares remained below the IPO price despite billions of losses.
Last week after receiving a mixed response from investors, WeWork has postponed its stock market flotation. Its parent firm- We Company was thought to be moving forward with listing on the Nasdaq next week.
WeWork, now styled as The We Company, was rapidly growing in 2018. The renowned unicorn increased its income in 2017 from $886 million to approximately $1.8 billion in 2018. However, that development stepped up with heavy losses.
A recent report suggested that WeWork is losing $219,000 every hour.
Now it will be interesting to see what is the turnout of the meeting and will Neumann retain it’s position as WeWork CEO or lose out to the investors.
