Adam Neumann, WeWork and the Failed 2019 IPO: What Happened

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On August 14, 2019, WeWork, then operating as The We Company, filed its prospectus with the US Securities and Exchange Commission. The first sentence about its mission said it wanted to “elevate the world’s consciousness.” Six weeks later, founder Adam Neumann was no longer CEO, the IPO was called off, and a company valued at $47 billion in January was looking for a rescue. This story shows that a prospectus can do what a board did not.

The WeWork S-1 everyone read

In January 2019, SoftBank put another $2 billion into WeWork at a $47 billion valuation. The company then had 528 locations in 111 cities and 29 countries. But the prospectus showed numbers that private investors had never had to see in public: in 2018, revenue was $1.82 billion and net loss was $1.93 billion. In the first half of 2019, the loss reached $0.9 billion.

The governance provisions drew even more attention. Neumann’s shares carried 20 votes each. The prospectus said plainly that Adam would control the majority of votes and could decide matters put to a shareholder vote. The company was to have controlled-company status, which on the stock exchange exempts it from some board independence requirements.

The media pulled more details out of the filing. Fortune described a $362 million loan that WeWork made to Neumann in April 2019, and a $500 million credit line from banks secured by his shares. A company managed by Neumann received about $5.9 million from WeWork for the rights to the “We” trademark. After a wave of criticism, Neumann returned that money. According to Bloomberg, when the prospectus was filed the board consisted only of men.

What the board did

The board did not act on its own initiative. It acted because the IPO had stopped adding up. In talks with investors, the valuation fell below $20 billion, and according to Reuters at one point to around $10 billion. And a $6 billion bank loan depended on a successful offering.

• September 13. An amended prospectus: votes per Neumann share drop from 20 to 10, a lead independent director is added, and Frances Frei becomes the first woman on the board. A provision under which a committee including his wife Rebekah would guide the choice of Neumann’s successor is removed.
• September 24. Neumann steps down as CEO and becomes non-executive chairman of the board. The votes on his share fall to three. Two interim co-CEOs, Artie Minson and Sebastian Gunningham, are to run the company. According to Bloomberg, the vote was unanimous and Neumann voted with the others. The main pressure came from Masayoshi Son of SoftBank.
• September 30. WeWork formally withdraws the prospectus.
• October 22. The board chooses a rescue from SoftBank over a debt offer from JPMorgan. The valuation is about $8 billion. Neumann leaves the board, and according to reports at the time his exit package is worth about $1.7 billion.

Neumann explained his resignation by saying that the attention focused on him in recent weeks had become a serious burden for the company.

The board reacted only when the math of the IPO stopped adding up.

WeWork valuation before and after the failed IPO

Marcelo Claure, the new board chairman appointed by SoftBank, told employees in October 2019 that the risk of bankruptcy was zero. Four years later, WeWork filed for creditor protection. It emerged from bankruptcy in June 2024 as a much smaller company, held mainly by former creditors. Neumann tried to buy it back but withdrew his offer. Before that, he had already started a new company, Flow, in which, according to The New York Times, Andreessen Horowitz put about $350 million.

What the WeWork collapse means for Nvidia

WeWork shows what happens when a board has no real power over a founder. With 20 votes per share, the board could only ask. Neumann was pushed aside only by a market that did not want to buy the shares, by banks that tied their loan to the IPO, and by a principal investor that preferred to take control rather than watch the company fall.

Nvidia was in a completely different position. Its shares are equal, and its bylaws allowed the CEO to be removed by a simple majority of the board, which apart from Huang consisted solely of independent directors. So Nvidia’s board had tools that WeWork’s board did not. What it lacked was something else: a chairman, a succession plan and experience with national security matters. One detail is common to both. In each company, the first move after the founder’s departure was to turn to people from its own leadership rather than an outside star: at WeWork, two interim co-CEOs; at Nvidia, chief financial officer Colette Kress as acting CEO.

The second lesson is about speed. WeWork lost more than 80 percent of its valuation in nine months, because the scandal hit at a moment when the company needed money from the market. Nvidia has more than $90 billion in revenue per quarter and does not need to ask investors for funding. That is why its drop, though painful, was measured in percent rather than orders of magnitude. I cover the November 2026 timeline in the report Fifteen Days That Changed Nvidia.

Frequently asked questions

Why did Adam Neumann leave WeWork?

After the prospectus was filed in August 2019, investors and the media criticized the company’s losses, his control over the votes and the transactions between him and the company. The valuation in IPO talks fell below $20 billion. Under pressure from SoftBank, Neumann stepped down as CEO on September 24, 2019.

How much was WeWork worth before and after the scandal?

In January 2019 it was $47 billion. In October 2019, with the SoftBank rescue, it was about $8 billion.

Did WeWork go bankrupt?

WeWork filed for creditor protection (Chapter 11) on November 6, 2023, and emerged from the proceedings in June 2024.

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