Reuters
- After its IPO plans blew up, WeWork cofounder and CEO Adam Neumann was forced out of the company.
- In his first interview in two years, Neumann was regretful but unapologetic about his time at the company.
- “It was never my intention for the company not to succeed as much as it did,” he said.
WeWork cofounder and former CEO Adam Neumann has regrets about his old company’s dramatic drop in value, from a pre-IPO valuation of $47 billion to a current market cap of about $7 billion.
And he feels sort of bad about all the WeWork employees who lost out in the process, thousands of whom were summarily laid off after the company’s messy IPO in September 2019.
But, despite repeated opportunities to do so during a roughly 40-minute interview with Andrew Ross Sorkin at the New York Times DealBook conference on Tuesday, Neumann isn’t apologizing.
“What do you say to all of the employees – and we’re talking about thousands of employees who lost their job, whose [stock] options effectively became worthless at that $47 billion valuation – who look at you and say, not only did this all happen under your watch, but you walked away with more than a billion dollars?” Sorkin asked Neumann during the interview.
Rather than apologize, Neumann said, “I understand. I understand that that’s the feeling and understand that that would be the perception.”
He went on to explain that there are different groups of employees who joined WeWork at different times and said the more than $1 billion he got while being forced out of WeWork was “a false narrative.” Instead, Neumann said, he got a $180 million “consulting non-compete fee” from WeWork’s largest investor, SoftBank, and another $870 million in stock sales on the private equity market.
By his own accounting, Neumann walked away from WeWork with about $1,050,000,000. Before the company went public this year, it was touting a 67% decrease in employees – meaning it laid off thousands of people in the wake of its IPO fiasco.
Neumann also addressed some of the juicy details that came out of the company’s September 2019 S-1 filing, including his sale of the “We” trademark to the company he was CEO of at the time.
Hulu
It was the lawyers’ fault, he said.
“Right before we went public, Miguel [McKelvey, cofounder] and I were sitting in a room and the lawyer said, ‘Guys, you have to hand over all your intellectual property.'”
In order to do that, Neumann said, the company’s two cofounders had to sell the IP to WeWork. About $6 million in stock was transferred to a holding company owned by the two cofounders in exchange for the various “We” trademarks.
The logic was laid out as such: Ahead of its initial-public-offering filing, WeWork reorganized and rebranded as The We Company. To rebrand itself around the word “We,” the company paid its own CEO nearly $6 million for trademark rights.
“This was what we told was the minimum amount for that IP,” Neumann said. “And we were going to donate so much anyway, we didn’t even think about it twice.”
Following the filing of WeWork’s S-1 paperwork, the news came out and WeWork quickly backtracked: Neumann and McKelvey returned the money and “gifted” the IP to the company they founded.
“We went back into the same room and said, ‘Guys, we told you, we didn’t want to do this. There must be something.'” Neumann said on Tuesday. “And then someone raised his hand in the back and said, ‘Well, if you gifted and paid the gift tax to the company to the IRS, then you can give it for free, which we did the next day. So that was not our intention. If I went back and I could change time and avoid that mistake and gifted them say I would.”
Regarding the upcoming WeWork documentaries and TV shows that depict his story at WeWork, Neumann said it was a reflection of society as a whole.
“What happened in the world that we can take a person, look exactly like them, put on prosthetics, put their wife and kids in the show, and then do a show on the narrative that is…not factually true?” he said. “I wish we were able to create entertainment that was different.”
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