WeWork founder Adam Neumann will step down after investor pressure

WeWork CEO Adam Neumann Resigns Amid IPO Drama

Adam Neumann expected to step down as WeWork’s CEO

But it is Neumann who has been the face of the company and carries baggage with him.

Other shareholders were calling for an inquest into Neumann's use of company money and whether he took drugs while working, The Times said.

Neumann also drew criticism after The We Company - the recently renamed parent of WeWork - paid him almost $6million for the trademark 'We.' He returned the money following the backlash.

Adam Neumann, WeWork's embattled co-founder and CEO, is stepping down.

WeWork's board of directors had become increasingly concerned about the company's low valuation and investors' confidence in the CEO, after the company essentially botched its initial public offering and canceled its pre-IPO roadshow to court institutional investors.

WeWork's Artie Minson, formerly co-president and chief financial officer, and Sebastian Gunningham, formerly vice chairman, will become joint CEOs of the company.

But investors saw two big problems: Neumann had too much control - he controlled a majority of shares and had the power to override any decision - and he was involved in a number of conflicts of interest.

Gunningham and Minson said they "anticipate hard decisions ahead" to protect the company's "long-term interests and health", they wrote in an email to staff reviewed by Bloomberg. The company, which is deeply unprofitable, will need to find an alternative source of capital next year if the IPO falls through. Over the last month, We worked to address some of those issues, but the company's unusual governance and concerns about its resiliency in an economic downturn were still a red flag to some investors.

Softbank has invested more than $9bn in the company and has reportedly soured on Neumann's leadership in recent months.

The company said it still plans to launch its IPO by the end of the year, but it was unclear what steps the company might take in the months ahead to dispel concerns that led to the delay.

But the brash charisma that once attracted investors emerged as a liability as WeWork made a decision to sell its shares on the public market. The company also needs to raise $3 billion in a public offering in order to unlock a $6 billion bank financing package.

The company could make other drastic changes in coming weeks. Neumann has continually insisted that WeWork is an "internet company", not just a shared workspace business.

WeWork's revenue has risen sharply, reaching $1.8billion in 2018. The Journal said the jet's owner recalled the plane before Neumann reboarded after the flight crew discovered more of the drug stuffed in a cereal box for the return journey.

His departure would be the most high-profile ousting of a tech entrepreneur since Uber sidelined founder Travis Kalanick in 2017 after a series of scandals at the ride-sharing company. After an IPO, his stock would carry three votes per share, down from 20 in the initial plan.

Latest News