Over the years, WeWork and its founder Adam Neumann have blazed a new path as it created a new industry altogether. The concept of co-working spaces might not have been particularly new, but Neumann managed to turn WeWork into a behemoth and with billions of dollars in funding, the company eventually expanded globally. It has grown very aggressively over the past few years and is now readying for its initial public offering at some point this year. However, it has now emerged that the founder of the company Adam Neumann had sold some of his shares and also taken loans to raise $700 million.
This revelation is a bit of a hiccup for the company as it readies for its IPO that could be one of the biggest in years on Wall Street. The investors who had got into the company in the early days had sold their shares and the price had been marked down as well. However, the revelation about Neumann’s share sale has come as a bolt from the blue from the company. The early investors had sold their stake to SoftBank and that share sale took the valuation of the company to $47 billion in January this year. As per the prospectus published by the company back in 2018, ahead of its bond sale, Neumann was the largest shareholder in the co-working space company. However, it is now unclear whether he still is the largest shareholder following his stake sale this year.
However, it has now emerged in a report that the company is now trying to resolve the issue ahead of its much-publicized IPO. WeWork is going to float another company, which is going to buy the shares that had been earlier sold by Neumann. That being said, it is interesting to note that earlier on in 2019, Neumann had stated that he had no intention of participating in a tender offer and instead wanted to grow the company. He had said at the time,
“This company is so early. I want to give it a second and really see it start maturing into the beginning of its potential and I think our peers and investors would be wise to do the same.”