Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

WeWork IPO spells rough landing for CEO Neumann

Stock MarketsSep 15, 2019 06:21AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items

By Herbert Lash

NEW YORK (Reuters) - Adam Neumann showed he can capitalize on troubled times a decade ago, tapping into demand for workspace by those forced out of jobs in the aftermath of the financial crisis to grow WeWork into a global brand commanding a $47 billion valuation.

Yet his plans to take WeWork's corporate parent the We Company public have backfired, as his company becomes the poster child for a bubble in venture capital fundraising that has pushed some start-ups to unsustainable valuations.

The We Company is contemplating slashing its valuation to as low as $10 billion from the $47 billion billing clinched in a private fundraising round in January backed by Japan's SoftBank Group Corp, people familiar with the matter said on Friday.

The sharp drop comes amid investor criticism of widening losses and Neumann's firm grip on the company.

Neumann, 40, is under pressure to proceed with the initial public offering (IPO) to raise cash to keep WeWork's operations going. The New York-based company rents workspace to clients under short-term contracts, even though it pays rent for them itself under long-term leases.

It is by far the biggest crisis Neumann has faced in his career, after arriving in New York at the age of 22 following service in the Israeli military.

He failed in several ventures before selling his first co-working firm, Green Door, for $300,000 with business partner Miguel McKelvey a decade ago. Neumann and McKelvey used the proceeds from that sale to start WeWork, with its first customers coming to the lower Manhattan site just off Chinatown in February 2010, after seeing ads in Craigslist.

Community was a driving force behind the new venture, launched at a time when millions who had lost jobs during the 2008 financial crisis were looking for flexible work space.

"It quickly became apparent that people were ready for a new approach to work, not just their workspace," Neumann said in a blog post in 2016, marking the launch in Berlin of WeWork's 100th site.

Neumann's parents divorced when he was a boy and he moved 13 times as a child and adolescent, living awhile in Indianapolis where his mother, an oncologist, finished her medical residency. He has called his childhood challenging because of the moves.

They returned to Israel where he lived in kibbutz Nir Am, near the Gaza Strip, and later served in the Israeli military, which he says taught him to be something greater than himself.

Neumann's experience on a kibbutz and McKelvey's growing up in a five-mother commune in Oregon have been cited as a reason the pair hit it off. McKelvey is an architect with the title of chief culture officer at WeWork.

Neumann, now a billionaire as the majority owner of We Company, also has said he thought money was the goal in life until he met his wife Rebekah, a cousin of actress Gwyneth Paltrow.

Formerly called chief brand director, Rebekah Neumann is referred to as a co-founder of WeWork. She is also a filmmaker and introduced Neumann to Kabbalah, a form of Jewish mysticism that has attracted celebrity followers. They have five children.


The early success of the shared workspace validated the global community Neumann envisioned where people can achieve more together than alone, or in the words of the company's famous mantra: "to make a life, not just a living."

Neumann arrived in New York in 2001 where he lived with his sister Adi, an Israeli model, and started a handful of businesses that failed, including women's shoes and a line of baby clothes with knee pads called Krawlers.

"When I came to New York I was angry about my history," Neumann told a luncheon at the New York Stock Exchange in June 2017, adding he learned that you don't deserve anything. "I became happy. My past helped make who I am today," he said.

Neumann, described as key to setting WeWork's strategic direction and execution priorities in the IPO filing, can come off as a bit zany. In the 2016 blog post he said the future of cities would require a healthy mix of 70% magic and 30% logic.

The We Company also said in the filing that its mission is to elevate the world's consciousness and that as a community company it is committed to maximum global impact, a vision Neumann endorses.

WeWork IPO spells rough landing for CEO Neumann

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email