MW Adam Neumann says WeWork 'failed' to seize opportunities, calls bankruptcy 'disappointing'
By Joy Wiltermuth
It has been 'challenging' to 'watch from the sidelines' as company failed to seize opportunities, Neumann says
Adam Neumann, co-founder and former chief executive of WeWork, said the office-sharing platform failed to seize opportunities and that its path to bankruptcy is "disappointing."
"It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than every before," he said in a statement.
Neumann, an Israeli entrepreneur, started WeWork in New York City with Miguel McKelvey around 2010, overseeing the company's voracious, cash-burning expansion into a major office tenant in the U.S. and abroad.
The company's goal was to extract more from renters for sleek office space than landlords were charging WeWork. In that pursuit, WeWork took out a pile of long-term lease obligations that peaked near $50 billion in 2019. The business, at that scale, was consistently unprofitable.
Following a botched attempt four years ago to take the company public at a $49 billion valuation, Neumann was ousted as CEO, with new management brought in to help restructure its leasing footprint. It eventually went public in 2021 at a smaller $9 billion valuation after it merged with a "blank-check" company, but continued to burn through cash.
WeWork's rise and fall under Neumann's watch inspired the "WeCrashed" miniseries.
Neumann in recent years founded Flow, a new real estate platform, looking to seize on the rise of remote work and the U.S. housing market shortage. It received a $350 million investment in 2022 from Marc Andreessen's a16z, a major venture-capital firm. Neumann told Fortune at a conference in July that he expected to "compete or partner" with WeWork.
A spokeswomen for Neumann declined to comment Tuesday when asked if Flow would make a bid for WeWork's business or leases in the wake of its bankruptcy filing. WeWork owed about $25 billion to landlords in outstanding full-term lease obligations as of this summer, according to CreditSights. A WeWork spokeswomen declined to comment on Neumann's statement.
David Tolley, WeWork's chief executive, said Monday evening that the company would be aggressively addressing its legacy leases and dramatically improving its balance sheet, as part of the company's bankruptcy filing.
WeWork also said it had reached a restructuring agreement with lenders holding about 93% of its secured notes to equitize about $3 billion in corporate debt.
-Joy Wiltermuth
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(END) Dow Jones Newswires
November 07, 2023 14:57 ET (19:57 GMT)
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