Adam Neumann at Fortune Brainstorm Tech 2016. Image: Stuart Isett/Fortune Brainstorm Tech/Flickr (CC BY-NC-ND 2.0)
Neumann is making a $500m bid to take over bankrupt WeWork after his controversial exit in 2019, but there is uncertainty around the billionaire’s financing and WeWork’s willingness to negotiate.
Adam Neumann, the controversial co-founder and former CEO of WeWork, is reportedly making a massive bid to regain control of the troubled workspace provider.
There are multiple reports that Neumann has offered more than $500m to buy WeWork. This was first reported by the Wall Street Journal but a person familiar with the matter also confirmed the bid to CNBC.
The bid is reportedly being made through Flow, Neumann’s venture into the rental real estate market, in a bid that includes “a coalition of half a dozen financial partners”. CNBC also claims the bid could rise up to $900m.
It is unclear if WeWork will accept the bid, though it is currently in a poor financial position. The company told multiple media sites that it is “no surprise we receive expressions of interest from third parties on a regular basis” and that it will review offers “in the ordinary course”.
What happened between Neumann and WeWork?
WeWork was founded in 2010 and saw a monumental rise in later years, soaring to a valuation of $47bn at its peak in 2019. But the company’s first attempt to go public in 2019 was abandoned over concerns around the control and leadership of Adam Neumann.
These concerns followed a profile piece on Neumann, which included claims that the WeWork founder left a cereal box full of weed on a plane and that just after firing 7pc of his staff he ordered trays of tequila shots to his room.
The report also had one source claim that Neumann’s wife Rebekah once had multiple employees fired immediately after meeting them because “she didn’t like their energy”.
During this period, investors soured on the company in the lead up to its planned initial public offering and existing investor SoftBank stepped in to rescue the company after its value plummeted. Thanks to this rescue offer, Neumann managed to walk away from the company with $1.7bn.
What has Neumann been up to since?
Neumann went under the radar for a few years after his controversial exit from WeWork until May 2022, when it was revealed he made a plunge into the crypto sector as the co-founder of Flowcarbon, backed by Andreessen Horowitz in a $70m round.
But this focus didn’t seem to last long, as Neumann quickly shifted his attention to Flow, which aims to disrupt the rental real estate market – though this start-up remains mysterious and details about its ambitions remain sketchy.
Despite this mystery, the venture managed to secure a reported $350m from Andreessen Horowitz in 2022.
How has WeWork fared?
WeWork’s woes did not go away after Neumann left the company. The wave of Covid-19 lockdowns, social distancing and the rise of remote working all had a profound effect on the office space provider’s operations, and it didn’t go public until 2021.
Since then the company has been on a long tumble down in value, as its share price plummeted by more than 98pc in 2023. Last November, WeWork filed for bankruptcy in the US, in an attempt to sort out its finances.
Despite its beleaguered position, WeWork appears to still have hundreds of locations worldwide, including a co-working space in Dublin.
Will WeWork accept Neumann’s bid?
Despite WeWork’s poor financial position, it is unclear if the company’s board is willing to take Neumann up on any offer. The former CEO has reportedly been attempting to buy his way back into the company for months, but letters written by lawyers suggest WeWork had been ignoring requests to provide more information for a bid.
Meanwhile, CNBC reports that there is some uncertainty around Neumann’s financing for the $500m offer, with conflicting claims around whether certain investment firms are backing Neumann’s bid.
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Adam Neumann at Fortune Brainstorm Tech 2016. Image: Stuart Isett/Fortune Brainstorm Tech via Flickr (CC BY-NC-ND 2.0)
