Adam Neumann cofounded WeWork in 2010 and built it into a global chain of coworking spaces with 528 locations in 111 cities across 29 countries and more than 500,000 members, according to its recent IPO prospectus. But concerns about the company’s path to profitability, its corporate governance, and Neumann’s personal and professional behavior since the company stated its intent to go public in August have led to reports Sunday that some members of the board of directors want to replace Neumann.
The move, first reported by the Wall Street Journal and then augmented by CNBC, would be at the behest of some of The We Company’s largest investors, including SoftBank, the Japanese telecom giant which has invested more than $10 billion into We via equity, debt, and its subsidiaries and over $100 billion in the global digital economy. The proposal is for Neumann to step into a nonexecutive chairman role in favor of someone who could take the company public without the concerns surrounding Neumann’s prior judgment, such as his decision to change the company’s name from WeWork to The We Company and then charge the company $5.9 million for the We trademark, which he owned via a separate entity (a move he and the company unwound in the wake of its disclosure last month).
Neumann faced a setback late last year when SoftBank CEO Masayoshi Son, his largest supporter, was prepared to buy out all of WeWork’s other existing investors and give the company up to $20 billion to fund its growth until market conditions and resistance within SoftBank’s Vision Fund and its backers prompted a reduced $2 billion investment, which valued the then rechristened The We Company at a $47 billion valuation. Son “called me,” Neumann told Fast Company last January. “He said, ‘We’re partners. What should we do?'” Son told him that the deal SoftBank and WeWork had spent months negotiating was no longer viable.
Now The We Company going public with Neumann as its leader may no longer be an option.