WeWork enjoyed a sparkling debut on the New York Stock Exchange yesterday as Adam Neumann, co-founder of the shared office space group, partied with early employees and celebrated a personal $1 billion windfall from the company’s flotation.
On Wall Street last night WeWork’s shares had risen by $1.40, or 13.5 per cent, to $11.78, valuing it at about $9.3 billion. Two years ago, it was valued at $47 billion.
The company — founded in 2010 by Neumann, 42, and Miguel McKelvey, 47 — has 851 locations in 152 cities in several dozen countries. It became the biggest renter of commercial property in London and New York, but was forced to shelve a planned flotation on Wall Street in 2019 because of investors’ concerns over its business model, as well as Neumann’s leadership. He left the business, which was bailed out by SoftBank, its largest shareholder.
Once seen as a prized bet by Masayoshi Son, the SoftBank boss who personally backed Neumann, the Japanese conglomerate was forced to come to WeWork’s rescue after its valuation was slashed to $8 billion in the wake of the botched attempt at an offering that threatened the company’s survival.
Neumann continues to hold a stake in the business. Under the terms of his exit package, he will be eligible to observe board meetings from next year, even though he is no longer a member.
The company’s new management is trying to draw a line under the Neumann saga and move on, having struck a $9 billion blank-cheque merger with BowX Acquisition Corp, a special purpose acquisition company, or Spac.
Neumann and McKelvey hosted a party with dozens of early WeWork employees to celebrate the listing at The Standard, High Line hotel in Manhattan’s fashionable Meatpacking District. Neumann, who was wearing a T-shirt bearing the slogan “Student for Life”, told the attendees that he had learnt “hard lessons” but was “excited for the future”.
WeWork has yet to make a profit. It reported a net loss of $888.85 million in the second quarter, compared with $863.83 million a year earlier.
The Times (Robert Miller) - https://www.thetimes.co.uk/article/wework-soars-on-new-york-debut-ldp2sjsxp