WeWork co-founder and former CEO Adam Neumann wants to buy the bankrupt company

Since December, Adam Neumann and other investors have been trying to get info from WeWork to form a bid to buy it out of bankruptcy.

WeWork co-founder and former CEO Adam Neumann wants to buy the bankrupt company
A WeWork logo is seen at a WeWork office in San Francisco, California, U.S. September 30, 2019. REUTERS/Kate Munsch/File Photo

The backstory: WeWork was once one of the most valuable startups in the US, making its name as a coworking space provider. Essentially, its business plan was to buy office spaces that it could revamp and rent out to businesses and freelancers. At its peak in 2019, WeWork was valued at US$47 billion, but it all came crashing down after the company failed its initial public offering (IPO) later that year. After filing for its IPO in August, WeWork faced a lot of scrutiny from investors and the media about its poor leadership, heavy losses and whether it could really make a profit. The company’s value had plummeted from US$47 billion to as low as US$10 billion in less than two months. Not long after filing, WeWork scrapped its IPO plans. 

More recently: Japanese tech company SoftBank made a deal to buy 80% of WeWork in 2019. Part of this included ousting co-founder and then-CEO Adam Neumann, who stepped down with a massive US$1.7 billion payout. Then, in 2021, WeWork went public at US$9 billion after merging with a special purpose acquisition company, BowX Acquisition Corp. 

But, in November last year, WeWork finally filed for bankruptcy. The company had been too ambitious with its growth and found itself in masses of debt. The thing is, WeWork spent a ton of money buying up office spaces, but with COVID, the rise of remote work and skyrocketing real estate prices, the demand for those spaces never caught up enough to turn a profit. 

The development: Since December, Neumann, his real estate startup Flow and other investors, including Dan Loeb’s hedge fund company Third Point, have been trying to get info from WeWork to form a bid to buy it out of bankruptcy, according to a letter sent to WeWork’s lawyers. But even though they’ve tried multiple times to get information from WeWork, they haven’t had any luck. In a statement to the Financial Times, Third Point said the firm is still in preliminary discussions and hasn’t committed to financing Neumann’s bid.

Right now, WeWork’s bankruptcy plan is to hand the company over to its most senior debt holders. But creditors and landlords have complained that little progress has been made since it filed for bankruptcy last year. Either way, the letter to WeWork points out that the company already turned down US$1 billion from Neumann in 2022, so it doesn’t seem to be running in his direction for a buyout.

Key comments: 

“We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders,” Alex Spiro, an attorney with Quinn Emanuel representing Adam Neumann, wrote

“In a hybrid work world where demand for WeWork’s product should be greater than ever ... the synergies and management expertise offered by an acquisition by my clients could significantly exceed the value of the Debtors on a stand-alone basis,” said Spiro in the letter to WeWork.

“Third Point has had only preliminary conversations with Flow and Adam Neumann about their ideas for WeWork, and has not made a commitment to participate in any transaction,” said the hedge fund’s statement to the Financial Times.

In an emailed statement to Bloomberg, WeWork said its current focus on addressing unsustainable rent expenses and restructuring the business “will ensure WeWork is best positioned as an independent, valuable, financially strong and sustainable company long into the future.”