Billionaire Adam Neumann has watched from the bench as the office “community” empire he built collapsed. WeWork filed for bankruptcy yesterday with documents revealing $19 billion in debt—throwing the future of many of its 777 locations into doubt.
Neumann cofounded the company in 2010 alongside Miguel McKelvey, with the pair enjoying the title of trailblazers, shaking up the commercial real estate sector with the idea of creating hip workplace memberships for office locations.
However despite the company’s growth, investors increasingly grew tired of Neumann’s antics, and the former CEO stepped down in 2019.
Now the man reportedly worth $2.2 billion has revealed it’s been difficult to watch his project come apart at the seams, potentially pouring salt on the wounds for investors who may still blame him, in some part, for the company’s ultimate demise.
In a statement released earlier this week, Neumann seemingly took a shot at his successors at WeWork, saying: “It has been challenging for me to watch from the sidelines since 2019 as WeWork has failed to take advantage of a product that is more relevant today than ever before.
“I believe that, with the right strategy and team, a reorganization will enable WeWork to emerge successfully.”
In fairness to WeWork’s current boss, he hasn’t had all that much time to get to grips with the company. David Tolley was announced as CEO less than a month ago, having acted as interim leader since May.
At the time, Tolley said he was taking steps to shore up the business, adding: “I emphatically believe we’re on the right path.”
A little over three weeks later, Neumann described WeWork’s bankruptcy—filed for its U.S. and Canada operations—as “disappointing” but paid kudos to the business’s “amazing team of mission-driven people.”
WeWork did not immediately respond to Fortune‘s request for comment made outside of normal working hours.
The path to WeWork’s bankruptcy
New York–based WeWork captured the attention of Silicon Valley and Wall Street alike as it attempted to segue from disruptor to market power with an IPO in 2019.
However, the SPAC went awry when an S-1 document ahead of the listing revealed a $1.9 billion loss in the year before going public.
Investors were understandably spooked, adding to fears about the sustainability of the business.
SoftBank, WeWork’s largest outside investor, then reportedly asked the business to shelve its on-again, off-again plans to float.
A year later SoftBank’s CEO Masayoshi Son publicly criticized the business, saying he was “foolish” to green-light his firm’s multibillion-dollar investment in the office-share company.
Son also slashed his valuation of WeWork, which at its height had been valued at $47 billion. In March 2020, Son valued the business at just $2.9 billion, a fraction of the investment his firm had poured into the venture.
Of course, by 2020 WeWork’s situation had only deteriorated further from its shaky IPO attempt.
Neumann had left the business following a blistering exposé by the Wall Street Journal of his leadership, an ensuing near-$6 billion battle over Neumann’s trademark of the word “we” and thousands of employees being laid off.
The largest factor working against WeWork was also near impossible to predict: a global pandemic that saw the majority of employees asked to work from home.
Lockdowns across the globe left the company’s sites empty, but by 2022—and despite a battle over the return to office—occupancy had returned to the 72% pre-pandemic occupancy rate.
The company had managed to go public by October 2021, valued at $9 billion. In the past year, WeWork’s share price has collapsed, down more than 99% to 84 cents.
Neumann has since launched Flow, which he describes as a “residential consumer-facing real estate company.”
Its proposal borders on rivalry with WeWork, with Neumann saying in July that Flow would either “compete or partner” with his former company.
