WeWork has announced it will be postponing its IPO indefinitely. reeveswiedeman reports on how, in a matter of weeks, one of the world’s most highly valued private companies became a cautionary tale
Photo-Illustration: Intelligencer; Photos: Ben Gabbe/Getty Images; Ruhani Kaur/Bloomberg via Getty Images On August 23, the head of U.S. marketing for WeWork emailed several of her colleagues to deliver some bad news. She’d met with Google representatives the day before to go over WeWork’s planned spending on advertising and received a distressing report.
Neumann was eager to go public. “The numbers will speak for themselves,” he told me when I interviewed him in his office in April, just before his vacation. WeWork was on an Amazon-like trajectory, he said — “Think of the stage that we’re in as the books for Amazon” — and he projected future annual revenues of $100 billion. “We have so many numbers we can’t really share,” he said, looking forward to the moment his books would be public.
An S-1 is meant to be a bland financial document, but WeWork’s took a different direction. With Adam’s encouragement, Rebekah became unusually involved in the artistic presentation of the document. “The traditional approach to producing an S-1 is bankers and lawyers hashing this out, but the process was continually usurped by Rebekah’s involvement,” one executive said, echoing a sentiment expressed by multiple people who worked on the project.
On August 14, just after 7 a.m., WeWork’s S-1 was officially released. It immediately raised eyebrows. The word community appeared 150 times, outstripped only by Neumann’s name, which was in the document 169 times. The S-1 detailed the extent to which Neumann controlled his company, and had benefited personally from his position: he had bought buildings in which WeWork then took out leases, and received $5.9 million in exchange for selling a set of We-related trademarks to his own company.
If the analysts had fun reading the document, it wasn’t because of the well-composed photos of WeWork members. Neumann could be charming, the analyst said, but he struggled to articulate what made WeWork’s business different enough from a company like IWG, which rents out bland but equally-flexible offices, to justify the distance between WeWork’s aspirational $47 billion valuation and the $3 billion valuation IWG has on the London Stock Exchange, where it has traded since 2000.
WeWork entered the second weekend of September planning to launch its roadshow as early as the following Monday, and that weekend, various deals were considered to prop up the offering.
McKelvey quickly turned over the podium to Neumann, and the co-founders gave each other what several employees described as a “really awkward hug.” McKelvey said he was surprised to see Neumann, who usually wore jeans and WeWork-branded T-shirts, wearing a blazer. On the broadcast, Neumann told his staff that he was “humbled” and grateful for the opportunity to change — the personality trait he had once described to me as his “superpower.
On Monday, Neumann met again with Dimon and various advisers and bankers on the 43rd floor of JPMorgan’s headquarters on Madison Avenue to decide how to proceed. On Tuesday morning, Neumann was at the bank’s headquarters again for a conference call with WeWork’s board to decide his fate. Nine years after founding his company, five months after publicly beginning its IPO process, and six weeks after filing the necessary paperwork, Neumann gave in.
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