Foundering WeWork Part 6: IPO -- Just Kidding
Jul 23, 2020
WeWork's failed IPO and the dramatic downfall of the company are explored in this episode, delving into the questionable actions of CEO Adam Neumann, the power struggle within SoftBank, and the controversial decisions leading up to the IPO flop.
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S-1 Disclosures Triggered The Collapse
- The S-1 revealed severe governance problems and conflicts of interest that shocked investors and reporters.
- Those disclosures turned the IPO from celebration to crisis almost overnight.
The Trademark Sale That Became Infamous
- Adam owned the trademark to 'we' and sold it to WeWork for $5.9 million in stock, a move that enraged investors.
- That single transaction became an easy symbol of governance failure.
Concentrated Control Frightened Investors
- Adam's 20-to-1 supervoting shares and succession plan favoring his wife highlighted concentrated control.
- Those governance structures signaled to investors that the board lacked independence.