Earlier this year, former WeWork CEO was among the world’s wealthiest people, according to Forbes. His net worth was around US$ 4.1 billion. But now, according to Forbes estimation, Adam Neumann is not a billionaire anymore. His net worth has tumbled to US$ 600 million in just seven months. Mr. Neumann did not comment. Also, WeWork declined to comment on the article. The swift fall of WeWork co-founder from the billionaire list because of the joint venture failure to complete an initial public offering (IPO). The plan was pulled for 47 days after publicly stating the Securities and Exchange Commission. In this strong opposition, Neumann was forced to step down as CEO, but still owned about 18% of the company, which has been in existence for nine years. The resignation took place as it was clear that investors of the public market were not smitten with Neumann as Masa Son. They did not believe that The We Company was as worthy as Son.
There are such good reasons. IPO filings show that the company has enough cash to maintain operations until the middle of 2020. Several analysts say that the two new co-CEOs could have been forced to file for bankruptcy without significant capital (such as provided by IPO) or sharp cuts in costs. According to Laura Kozelouzek, Quest Workspaces’s founder and CEO said that they need to reach a place where they can generate real income. Quest Workspaces has more than a dozen co-working locations in Florida and New York. She added that it’s helpful to scale down and sell business jets, but now, if the market falls in any way which she hopes so, it would be difficult to climb out of their predicament.
Scott Galloway, blunt WeWork critic and a marketing professor at NYU Stern School of Business, said that no one would again believe that having an application for conference booking will make you a technology company. He also added that if the new co-CEOs have a tough but viable plan, they will announce new funding from Softbank. If they can execute it perfectly, he thinks the company’s market value may reach US$ 5 billion – US$ 10 billion. Until then, this may indeed become very ugly, very fast for many people. Our estimate regarding the wealth of Neumann is based on his share in The We Company. In addition, an estimated US$ 500 million in stock sales. He owes around US$ 380 million on credit line. The detailed information was included in the public offering statement of the company. The document also showed that Neumann’s last sale of the company shares was in October 2017. Around 15% of its past sales value was donated to charity.