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WeWork co-founder and CEO Adam Neumann has stepped down from his position as CEO and will assume the role of non-executive chairman of the board, the company said in a statement released Tuesday after a report from the Wall Street Journal. WeWork Vice President Sebastian Gunningham and the company's President and Chief Operating Officer Artie Minson will be co-CEOs.
The eclectic executive faces growing pressure to give up its throne after another WSJ report highlighting its drug use and its desire to become Israel's prime minister, among other strange behaviors.
"As co-founder of WeWork, I am so proud of this team and the amazing company we have created over the last decade," Neumann said in a statement. "Our global platform now covers 111 cities in 29 countries and serves more than 527,000 members a day. Although our business has never been stronger in recent weeks, the surveillance that was directed against me had become an important distraction and I decided that it was in the company's best interest to leave his position. Director General. Thank you to my colleagues, our members, our proprietary partners and our investors for continuing to believe in this great company. "
SoftBank, the Japanese investor who injected billions of dollars into the co-working star activity, reportedly encouraged – rather than implemented – Neumann's announced transition out of the role of CEO in anticipation of its initial public offering . According to the WSJ, moving to the president's headquarters "would allow [Neumann] stay in the company he has integrated into one of the most valuable startups in the country, but must show new leadership in order to pursue an IPO that would provide him with the liquidity necessary to maintain his torrid growth. "
WeWork unveiled its unusual IPO prospectus last month after raising more than $ 8 billion in equity and debt financing. The New York-based company was valued at $ 47 billion, largely thanks to SoftBank's repeated investments, despite financial losses of nearly $ 1 billion for the six months ended June 30.
Wall Street investors were skeptical about the dazzling value of the valuation, which led to reports that WeWork would like to get a $ 15 billion valuation instead, a magnificent defeat for the company. one of the most valuable private companies in the world. In the end, WeWork totally delayed its float, saying it was planning to become public "by the end of the year."
In an additional effort to appease Wall Street, WeWork has amended its S-1 filing to include the appointment of an independent lead director and its first board member, Frances Frei. In addition, the company has reduced the strength of Class B and Class C shares so that Neumann does not have the right to vote equal to 20 times the voting rights of other shareholders and has removed his wife from succession planning. of the society.
According to the latest news, Neumann's voting shares will be reduced from 10: 1 to 3: 1.
At the same time, WeWork is working with bankers to reduce the cost of its losing operation. A new report from The Information indicates that the company could remove up to 5,000 roles, one-third of its workforce.
The saga of WeWork's IPOs draws many parallels with Uber's struggles before the IPO. For years, both companies are led by Neumann and Travis Kalanick, respectively. The two men were ousted, mostly by frustrated board members, worried about the potential spin-offs of the multi-billion dollar IPO.
In the face of WeWork's difficulties in making a stock market listing and Uber's disappointing public market performance, private market investors may realize that Silicon Valley's goblin dust does not have the same weight on Wall Street .
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