How WeWork spiraled from a $47 billion valuation to talk of bankruptcy in just 6 weeks
Just six weeks ago, the coworking giant WeWork was the US's most valuable tech startup.
Then it filed its S-1 registration for an initial public offering, disclosing a bevy of conflicts of interest and mismanagement by its magnetic and eccentric cofounder, Adam Neumann.
Investors, reporters, and analysts, chastened after seeing Theranos revealed as a massive fraud and watching Uber fail to live up to the hype, didn't let another visionary founder pull the wool over their eyes.
Neumann's IPO dreams crashed and burned, and now he's been ousted as CEO and observers are wondering whether WeWork can avoid bankruptcy.
Based on reporting from Business Insider and other news outlets, this is the story of the six weeks that almost ended WeWork.
At 7:12 on a mild late-summer morning in New York City, WeWork's registration papers hit the Securities and Exchange Commission's website. The filing, called an S-1, was expected. It was a crucial step in what up to that point had been an exquisitely choreographed march toward an initial public offering for the tech world's most highly valued startup.
With its stratospheric $47 billion valuation and preposterously ambitious cofounder and CEO, Adam Neumann — his goal wasn't merely to make money or rent office space, he claimed, but to "change the world" — WeWork had become a glaring symbol of Silicon Valley's boundless audacity and self-professed exemption from the laws of economics.
In the early-morning light, thousands of investors and journalists would get their first real peek at the company's financial condition and be able to judge for themselves whether WeWork was really, as its founder claimed, on a path toward galactic dominance and unimaginable profit.
Almost immediately, all hell broke loose. A steady stream of rapid-fire headlines detailed Neumann's self-dealing, mismanagement, and bizarre behavior. Within 33 days the offering was scuttled, WeWork's valuation plummeted 70% or more, and Neumann, who believed he would become the world's first trillionaire, was ousted as CEO. What was supposed to be Neumann's coronation as a visionary became one of the most catastrophically bungled attempted debuts in business history.
Courtesy : Business Insider