Adam Neumann Drops Bid To Acquire Bankrupt WeWork

The WeWork founder Adam Neumann has shelved his bid to acquire the bankrupt shared office space provider. From a report: It emerged earlier this year that Neumann, who was ousted from the business in 2019 following a botched attempt to take it public on the stock market, was seeking to buy the business. His new real estate venture, Flow Global, submitted a bid of more than $500m to take over WeWork and its assets. On Tuesday morning, however, Neumann confirmed that Flow was walking away from his dream to take back control of the firm.

"For several months, we tried to work constructively with WeWork to create a strategy that would allow it to thrive," he told DealBook. "Instead, the company looks to be emerging from bankruptcy with a plan that appears unrealistic and unlikely to succeed." WeWork, with over $13bn in long-term leases, filed for Chapter 11 bankruptcy protection last November in order to renegotiate these agreements. At its peak, the company had been valued at $47bn as investors including the Japanese multinational SoftBank lined up to back it. As it prepared to go public in 2019, however, analysts gave it a far lower valuation. After it eventually went public, in 2021, its market valuation tumbled to less than $50m.

The whole shared office thing

[ddtmm]

The whole shared office thing was doomed with covid came around but in the age of so remote working I can see it making a lot of sense especially for smaller businesses. The only thing that stands in the way is the same old thing that every business needs - decent management.

Re:

[Ed Tice]

There is definitely a market for small and even large businesses who need temporary shared work places. If your company is entirely remote and you want to have a meeting, you can't necessarily do it at the CEOs house. However, there isn't a good model for a company like WeWork to deliver this. Almost every hotel has meeting rooms and conference centers that can be rented and even some suites that can be converted to meeting rooms. A company like WeWork will never match that price point.

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[timeOday]

Almost every hotel has meeting rooms and conference centers that can be rented and even some suites that can be converted to meeting rooms. A company like WeWork will never match that price point.

Well, they might for a while, if they are basically airBnB for downtown office space that is currently sitting vacant and not generating any revenue.

Re:

[PCM2]

For small businesses especially, what WeWork had to offer was actually very competitive vs. a traditional lease.

That may be why they're bankrupt.

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[Ed Tice]

That's certainly a contributing factor. For WeWork's longer-term tenants, they can probably make a profit. Their basic business model was to take a long-term lease (5-10 years) and then make short-term leases (1 year or so) at a markup. Basic short-term vs. long-term arbitrage. But then they also had "drop in" spaces that you could buy. That part of the business can never be viable because, in order for it to be a desirable product, you don't want to be full regularly when people try to use the space whi

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[rudy_wayne]

There is definitely a market for small and even large businesses who need temporary shared work places. If your company is entirely remote and you want to have a meeting, you can't necessarily do it at the CEOs house. However, there isn't a good model for a company like WeWork to deliver this. Almost every hotel has meeting rooms and conference centers that can be rented and even some suites that can be converted to meeting rooms.

Exactly right. WeWork has no need to exist and was never a serious business in the first place. They were just another scam company trying to insert themself as a middleman so they can skim a little bit off of each transaction.

It was doomed before that

[rsilvergun]

The real estate they were using to make it all work was being subleased and I've seen articles that break down the costs and basically showed it was impossible for the company to ever turn a profit. The entire thing was always something like a pump and dump scam.

Adam Neumann liar

[gavron]

Weigh two things against each other:
1. The bankruptcy filing which includes the secured creditors, unsecureds, US trustee, bankruptcy admin, and court
2. What Adam Neumann says

If he's such a "visionary" that he knows better than everyone else how to run that company, he would't be on the outside looking in on this BK filing.

He's a lying conniving cultist piece of shit who's just not as good as SBF (prison), Musk (not yet in prison), or many others.

When he cries and whines that they just won't listen to him,

From 47B to 50M!

[Robert Goatse]

Wow, that's an extreme drop in valuation. I wonder if those existing 13B worth of leases will be discharged in bankruptcy?

I don't see any chance WeWork emerges from this debacle unless they drastically reduce their holdings, maybe to major markets only?

Re:

[PCM2]

I don't see any chance WeWork emerges from this debacle unless they drastically reduce their holdings, maybe to major markets only?

And in any event, they're going to take a bath. Back in the early days, we all assumed they had some type of genius dealmakers on staff who were able to score incredible deals on commercial real estate. Turns out that wasn't the case, at all. They were paying sucker's rates, all in the name of "expansion." Especially post-Covid, that money ain't coming back.

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[JaredOfEuropa]

They were paying sucker’s rates on properties that Neumann owned. He’s been lining his pockets at the expense of WeWork investors from day one.

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[PCM2]

Ah, yes. Forgot about that bit.

WeWork lol

[earlone]

Seriously, with a name like that, I can only imagine the conference rooms are named 'Procrastination Pod' and 'Distraction Den'. Who needs productivity when you've got bean bags and ping pong, right?

I'd argue it was a solution in need of a problem..

[King_TJ]

I remember having my own small business at the time WeWork was the "new hotness", and I knew a number of others who did too. In pretty much every case, we had that initial thought of, "Hey, cool! We could have an affordable commercial office space to call our own." And then we thought about it from a "cost/benefit" standpoint and realized, "Makes no real financial sense."

I mean, one issue with it is, you don't get the full advantage of having your own rented office suite. You're in this property everyone knows is a "WeWork owned" facility, so the optics aren't great. If you have visitors, they're immediately communicated the message that you're some kind of new/small business startup. That's probably the exact opposite of the image you're trying to put out there by having a commercial address people can come see you at, to begin with.

Especially after COVID, I think it taught a whole lot of people that they really could run a successful business out of their home instead of needing to pay for an office. (The need to video-chat encouraged a lot of Internet service upgrades to better speeds, for example, and a lot of people upgraded to better/faster computers and better monitors and printers/scanners/copiers, plus good web-cams and put it all in an appropriately furnished room they designated as their "office".)

And now, with so much available office space out there? I think it wouldn't be that hard to negotiate a pretty good deal on your own space, instead of bothering with some shared office situation. If your physical location isn't a big deal (as it's really not for many small business ventures), many smaller midwestern cities are full of properties you could buy straight out for as little as $100,000 or so and then you've got your own entire office building to do with as you please. No restrictions on anything like cutting a hole in a ceiling or wall to put a satellite dish on the roof, or ?

Could we ditch the Kombucha at WeWork now?

[thesjaakspoiler]

Rebekah won't be coming back soon so maybe we get some real drinks at WeWork?

this guy invented pump and dump

[elcor]

and this is his phD course