Key Takeaways
- • Adam Neumann says a 2016 car ride with SoftBank founder Masayoshi Son, in which Son offered about $4.2 billion, marked the point where WeWork lost its focus on mission and shifted to money, according to his September 28 appearance on The Diary of a CEO podcast.
- • SoftBank's investment, announced the following year, ultimately totaled $4.4 billion, and WeWork peaked at a $47 billion valuation after SoftBank invested $2 billion in January 2019.
- • Neumann acknowledged WeWork's core mismatch of signing long-term leases in expensive cities while renting to members on short-term commitments, and WeWork's 2019 IPO was shelved amid investor concern over losses and Neumann's control.
- • WeWork filed for Chapter 11 bankruptcy in November 2023 with nearly $19 billion in debt; Neumann's early 2024 bid to buy it back, reportedly backed by more than $500 million in financing, failed.
- • Neumann now leads Flow, a residential real estate startup he launched in 2022 with a $350 million investment from Andreessen Horowitz.
Summary
WeWork co-founder Adam Neumann says a 2016 meeting with SoftBank founder Masayoshi Son was the start of the company's decline. Speaking to Steven Bartlett on The Diary of a CEO, released September 28, Neumann said WeWork's board had agreed the night before that he would raise $300 million to $400 million, slow growth, reach profitability and take the company public. Son, pressed for time before a meeting with then-President-elect Donald Trump, spent about 12 minutes in WeWork's lobby before inviting Neumann to continue the discussion in his car. By the end of the roughly half-hour ride, Son had offered about $4 billion, "$4.2 to be exact," according to Neumann, and both men signed terms on an iPad. SoftBank's investment, announced the following year, ultimately totaled $4.4 billion.
At its peak, WeWork was valued at $47 billion after SoftBank invested $2 billion in January 2019. The company was losing billions even as its leadership lived expansively, including a roughly $60 million Gulfstream G650ER used extensively by Neumann and a residential real estate portfolio that the Wall Street Journal valued at around $90 million. WeWork had disclosed a $1.9 billion net loss for 2018. When it published its IPO prospectus in August 2019, investors objected to mounting losses and Neumann's outsize control. The offering was shelved, and Neumann stepped down as CEO that September.
Neumann told Bartlett that WeWork had signed long-term leases in expensive cities while renting to members on short-term terms, saying, "We were taking long-term commitments against short-term commitments." He attributes the problem to how success was defined: a focus on money rather than fulfillment. The pandemic, which emptied offices in 2020, deepened the company's troubles. WeWork filed for Chapter 11 bankruptcy in November 2023 with nearly $19 billion in debt. Neumann reportedly tried to buy it back in early 2024 with a financing package of more than $500 million, but the company emerged from bankruptcy later that year without him.
Neumann now runs Flow, a residential real estate startup he launched in 2022 with a $350 million investment from Andreessen Horowitz. He says he has no regrets and measures success by how he expects to feel at the end of his life.
At its peak, WeWork was valued at $47 billion after SoftBank invested $2 billion in January 2019. The company was losing billions even as its leadership lived expansively, including a roughly $60 million Gulfstream G650ER used extensively by Neumann and a residential real estate portfolio that the Wall Street Journal valued at around $90 million. WeWork had disclosed a $1.9 billion net loss for 2018. When it published its IPO prospectus in August 2019, investors objected to mounting losses and Neumann's outsize control. The offering was shelved, and Neumann stepped down as CEO that September.
Neumann told Bartlett that WeWork had signed long-term leases in expensive cities while renting to members on short-term terms, saying, "We were taking long-term commitments against short-term commitments." He attributes the problem to how success was defined: a focus on money rather than fulfillment. The pandemic, which emptied offices in 2020, deepened the company's troubles. WeWork filed for Chapter 11 bankruptcy in November 2023 with nearly $19 billion in debt. Neumann reportedly tried to buy it back in early 2024 with a financing package of more than $500 million, but the company emerged from bankruptcy later that year without him.
Neumann now runs Flow, a residential real estate startup he launched in 2022 with a $350 million investment from Andreessen Horowitz. He says he has no regrets and measures success by how he expects to feel at the end of his life.
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