Office rental broker Adam Neumann enters Low Earth Orbit to declare

A man wearing headphones sits in front of a white screen

Adam Neumann, the charismatic entrepreneur who led WeWork to become one of the world's most valuable start-ups, is stepping down as chief executive after a plan to take the office-sharing company public hit a wall. WeWork will name two current executives, Sebastian Gunningham and Artie Minson, as interim co-chief executives, one of the people said.

We Company declined to comment. The company delayed the share sale last week after earlier reducing its estimated market value to as little as US$15 billion, from the US$47 billion valuation it sold shares at privately in January.

Of course, Neumann has the power through his super majority shares to fire the board, but going nuclear would only reinforce his reputation as an imperial CEO and hurt the stock offering, sources added.

Masayoshi Son - founder and CEO of Japanese conglomerate SoftBank Group Corp., which is WeWork's biggest investor - was among those pushing for Neumann to resign, a person familiar with the matter has said. But even that move and his role change may not assuage concerns about the company, which lost more than $1bn past year.

He's stepping down because of the recent scrutiny of his leadership over the past few weeks, he said, which has been "a significant distraction". The report also detailed tequila-fuelled company parties and weird statements by Neumann about his plans to become immortal and to use We to "solve the problem of children without parents".

WeWork makes money by leasing buildings and dividing them into office spaces to sublet to members, who use an app to book ready-made offices or desks and get access to front-desk service, trendy lounges, conference rooms, free coffee and other services. Now, its IPO is on ice - it was originally supposed to go public this month, but is now said to be aiming for the end of the year.

The move concludes talks that began in recent days between Neumann and his company's investors and board members.

He also invested in properties that leased space to WeWork. The company also needs to raise $3 billion in a public offering in order to unlock a $6 billion bank financing package.

As part of Neumann's departure, he has agreed to further reduce his sway in board decisions, and his wife, Rebekah, will relinquish her role in the business, said the people, who asked not to be identified because the details are private.

Neumann co-founded WeWork with his wife, Rebekah, and architect Miguel McKelvey in NY in 2010.

The company reported that its revenue increased to $1.8 billion in 2018 from $886 million the prior year, but also that its net loss more than doubled to $1.9 billion in the same period. "As we take this next step in our company's journey, I am equally ready to listen, grow and continue working relentlessly on my commitment to all of you". In 2017, under pressure from investors, Travis Kalanick resigned as chief executive of Uber.

Related:

Comments

Latest news

PM Modi reaches Houston to attend 'Howdy Modi' event
The two leaders echoed similar sentiments on various issues, including terrorism, trade and defence. "But it can't hurt". Indian Prime Minister Narendra Modi and US President Donald Trump greet 50,000 people in Houston, Texas.

Iran's Rouhani blames foreign forces for causing 'insecurity' in the Gulf
The US is sending more troops to Saudi Arabia after an attack on Saudi oil facilities both nations blame on Iran. After the attack the Pentagon ordered USA troops to reinforce Saudi air and missile defenses.

Kim Kardashian and Kendall Jenner laughed off stage at 2019 Emmys
Fans watching at home and those who were in the room noted the awkward moment on Twitter . RuPaul's Drag Race won the category, by the way, in case anyone was interested.

Cut again, Antonio Brown says he's done with the National Football League on Twitter
The Patriots signed him anyway, and just days later a woman filed a civil lawsuit in Florida accusing him of rape. The source of Brown's ire appears to be the bonus money he won't collect from the Oakland Raiders and Patriots.

Other news