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As we have already pointed out, WeWork founder Adam Neumann has not only locked the control of the company, now known as We, but he has also found a multitude of ways to extract millions of dollars in shares, cash, loans and other assets.
One of the most amazing transactions revealed in the company's S-1 documents filed last week is that his company paid him millions of dollars to become his own name.
Specifically, in July, just before sharing its financial data with the public as part of its initial public offering process, the company reorganized to form what it calls a "UP-C" structure, which renamed the company "We".
When that happened, the newly appointed company We paid to the private company of Neumann, called We Holdings LLC, $ 5.9 million in "dividends" to acquire the trademark of "We". S-1 indicates that the value of this mark was "determined following a third-party evaluation".
However, the S-1 does not say why the jury thought that the other brand of Neumann was the owner of the mark. After all, the name of his private company, We Holdings, is derived from the name of the original company, WeWork. And it's not an unrelated entity.
We Holdings acts as a holding company for the class B shares held by Neumann and its co-founder, Miguel McKelvey.
Read more: Here's who enriches if WeWork succeeds its IPO
These class B shares give 20 votes per share on the main company, We. This represents a high number of votes, even by Silicon Valley standards, where "super vote" shares are generally 10 votes per share.
In the case of Neumann, his shares have 20 times more voting power than all the others. And it is interesting to note that Neumann controls all the votes attached to all Class B shares, even if he does not actually own the shares themselves, says the S-1 in different notes.
He also controls all votes attached to the Class C Shares at 20 votes per share, whether or not he owns those shares directly. They are controlled by another related company in this UP-C structure called "We Company Partnership", which, interestingly, also uses "We" in its name.
It is no exaggeration to say that a company controlled by Neumann paid $ 5.9 million to another company controlled by Neumann to use the word "Us", which is used by both of them as well as by other members of their family.
New York University professor Scott Galloway spoke of this $ 5.9 million transaction in his analysis of the company, which he called "WeWTF". In this document, he advised immediately: "Do not buy this stock."
Galloway wrote: "Adam also owned the rights to the" We "brand, which the company decided to own and paid to the founder / CEO $ 5.9 million for rights.The rights on a name almost identical to that of the company where he is located the founder / CEO and principal shareholder.You CAN NOT DO THIS THIS — UP. "
We, the company, declined to comment.
Are you a WeWork insider with a preview to share? We want to hear it. [email protected], deputy ministers on Twitter @ Julie188 or on Signal.
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