A block of directors at WeWork plans to push through
to step down as CEO after a tumultuous week in which his eccentric behavior and drug use came to light and the startup postponed its long-awaited stock market.
Group comprising employees associated with
The company's largest investor wants Mr. Neumann to relinquish his title to CEO of We Co., the parent of the office-sharing company, people familiar with
The board is expected to meet as early as this week and possibly consider proposing Mr. Neumann to become the executive chairman of Us, some people said. This would allow him to stay with the company he builds in one of the most valuable startups in the country, but inject a new IPO guidance that will bring us the money he needs to sustain his tough growth.
The company burns more than $ 2 billion in 201
Every coup attempt is a gamble: Mr. Neumann still has allies among the directors and the ability to fire the entire board thanks to stocks he controls carrying additional votes. But SoftBank, which has invested more than $ 9 billion in the company and is represented on the board, also has significant influence and we need the Japanese conglomerate to continue pumping cash.
It was impossible to learn how all of us Directors – there are seven, including Mr. Neumann – are aligned and the situation is difficult.
Share your thoughts
Will WeWork founder Adam Neuman retire and would it be in the best interest of the company? Join the conversation below.
The patience of SoftBank has been tested. Earlier this year, it bought $ 47 billion worth of We shares, a level that now looks wildly outdated. As we prepare to list its stock earlier this month, the company's expected valuation has dropped to about a third of that.
Even with this discount, we were forced to delay the offering as a criticism aimed at managing the company and its financial losses. – $ 1.6 billion last year and growing, despite rapid revenue growth.
The Wall Street Journal reported last week that Mr. Neumann had taken marijuana on a flight from New York to Israel, prompting the aircraft owner to recall the aircraft. The revelation added concerns about Mr Neumann's management style and transactions with the company that made him rich.
We have already made management changes designed to win unwanted investors. On September 13, he reduced Mr Neumann's share potency – still leaving him tightly controlled – as well as reducing his wife's role in corporate affairs and returning his controversial sale of the company to the trademark "We."  SoftBank has long been wary of Mr Weiman's high valuation and Mr Neumann's unusual behavior, even as they continue to give him money. SoftBank was expected to buy $ 1 billion in stock in its initial public offering, much of the roughly $ 3 billion it wanted to raise from investors, the issue said. That commitment wasn't enough to keep the list on the list, but we promised to make it this year.
CEO of SoftBank
he has long been a vocal advocate of We and Mr. Neumann, who, like him, is perceived by many as a visionary. Mr Son told CNBC in March that he still wanted to invest more in the company, despite concerns from some of its own investors. SoftBank also invested in We, directly and through the Vision Fund, a $ 100 billion fund that raised in 2017.
The Vision Fund's $ 4.4 billion investment in 2017 was estimated at about $ 20 billion. When the biggest investors of the fund, a pair of governments in the Middle East, last year joined in to invest more, SoftBank itself became involved, earmarking $ 4 billion for an estimated $ 47 billion.
Mr. Neumann would not be the first creator of startup companies to be challenged.
& # 39; p
was pushed out of his board in 2017 after the fishing company was widely criticized for chauvinistic and toxic work culture. Uber went public this spring with a new CEO brought in from outside.
Email Mourin Farrell at firstname.lastname@example.org, Liz Hoffman at email@example.com, Elliot Brown at firstname.lastname@example.org and David Benoit at david.benoit @wsj. com
Copyright © 2019 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8