The ups and downs—mostly downs, as of late—of the company’s bid to go public have played out in its regulatory filings, in the press, and behind the boardroom door.
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Sources told the Wall Street Journal over the weekend that several of The We Company’s directors are placing pressure on Neumann to step down from the CEO seat. Notable among the stakeholders calling for his ousting are investors at SoftBank which, through its $100 billion Vision Fund, has invested upwards of $10.5 billion in the coworking space and office leasing company. Ronald Fisher represents the SoftBank Vision Fund’s interests on WeWork’s board of directors.
Investors are concerned that Neumann’s unconventional leadership style and approach to structuring business relationships is hampering the company’s efforts to go public. WeWork, which was last valued at roughly $47 billion in its last round of funding, contemplated cutting its valuation to as low as $15 billion, or lower. Last week, The We Company shelved its IPO roadshow until “at least” October.
Like many large-scale startups going public these days, The We Company loses more money than it makes. The company sustained a nearly $1.7 billion operating loss in all of 2018, and lost nearly $1.4 billion in the first six months of 2019 alone. Without the money it expects to raise in its IPO, alongside the debt facilities which are contingent on a successful offering, The We Company will likely run out of working capital within the next year, barring significant changes to its business.
Although the board recently pushed through a number of changes to the company’s governance structure, it’s unclear how it can force Neumann out of the CEO spot. Neumann controls a supermajority of the company’s voting shares, and although their voting “weight” has been halved, it seems like he’ll have to relinquish executive control voluntarily.
Illustration: Li-Anne Dias