Just six weeks ago, coworking giant WeWork was the most valuable tech startup in the US. He then filed his S-1 registration for an initial public offering, revealing a host of conflicts of interest and mismanagement by its eccentric co-founder, Adam Neumann.
Investors and analysts, after seeing that the Theranos startup was a scam and how Uber was struggling with business, did not allow another visionary entrepreneur to pull their wool over their eyes, according to the Business Journal.
Neumann's IPO dreams of pumping up the company's $ 100 billion worth have collapsed, and he was ousted as CEO. Analysts wonder if WeWork can avoid bankruptcy?
Instead of billions and "changing the world" - doom
With his stratospheric $ 47 billion valuation and apparently aspiring co-founder and CEO, Adam Neumann - his goal was not just to make money or rent office space, but to "change the world", WeWork has become a great symbol of Silicon Valley, boundless courage for not governed by the laws of economics.
However, hell broke out after signing up for the IPO. Media headlines spoke of Neumann's mismanagement and bizarre behavior.
Within 33 days, the offer was canceled, the estimate of WeWork dropped 70% or more, and Neumann, who believed he would become the first man worth a trillion dollars, was ousted from the CEO position.
The 40-year-old CEO jeopardized the 12,500 employees the company has. He found himself in a conflict of interest because he was getting loans for the company, which he used for his lavish life.
One, for $ 362 million, is related to early testing of stock options. He had a $ 500 million line of credit secured by his shares.
Perhaps the most worrying conflict of interest is that he bought the trademark rights of 'We' through a holding company, and WeWork paid him $ 5.9 million to license it.
A number of such things have been revealed regarding other employees at the top of this company.
However, perhaps the most devastating for the company was its business model
$ 47 billion in future lease payments to homeowners hung overhead, with revenue of just $ 4 billion. Two dollars were spent on every dollar that was earned.
In the first half of this year, losses rose to $ 904 million, even as revenue doubled to $ 1.54 billion.
Despite Neumann saying that there would be changes in management and that he would return the money paid to him for the name 'We', negative media analyzes on the company's controversies and values continued to be published daily.
Shift and bankruptcy
Instead of embarking on an announced tour of the presentation, WeWork has announced that it is delaying the listing of shares as investors give up or halve their stakes.
Then another media bomb went off.
The Wall Street Journal published an article detailing Neumann's frequent marijuana use and propensity for tequila. Marijuana was found in the cabin of an airplane traveling by an entrepreneur.
The article was a turning point in how investors and employees perceived it, and one of the biggest announced SoftBank investors, as well as others, demanded a change in company leadership.