🏢 SoftBank offered Adam Neumann up to $1.7B to leave WeWork

Adam Neumann co-founded WeWork in 2010 and ran it as CEO until investors forced him out in September 2019, days after a planned IPO collapsed over corporate-governance concerns. Within weeks, SoftBank had agreed to a rescue deal that could hand him a nearly $1.7 billion windfall to step down from the board and sever most of his ties, the Wall Street Journal reported on October 22, 2019. WeWork itself did not file for bankruptcy until November 6, 2023 - four years and a SPAC merger later.

The exit, priced in cash

The October 2019 package broke down to up to $970 million for Neumann's remaining shares, a $185 million consulting fee, and $500 million in credit to help him repay loans to JPMorgan Chase, UBS and Credit Suisse, CNBC reported, citing people familiar with the terms. He was also set to collect a $46 million annual consulting fee - more, a group of WeWork employees noted in an open letter, than the total pay of all but nine US public-company chief executives in 2018.

Renegotiated, not reduced

The 2019 tender offer did not survive intact. SoftBank walked away from its agreement to buy $3 billion of WeWork stock in April 2020, and Neumann sued. By February 2021 the two sides had reached a proposed settlement: SoftBank would buy about $1.5 billion of stock from investors - roughly half the original $3 billion - including nearly $500 million from Neumann for about a quarter of his shares, Business Insider and the Wall Street Journal reported. The settlement also handed Neumann an extra $50 million, and securities filings showed an enhanced stock award on top.

"an enhanced stock award worth roughly $245 million, a benefit that wasn't extended to other early shareholders and hasn't been previously reported"

The Wall Street Journal, reporting in May 2021 on WeWork securities filings

The company he left behind

WeWork had raised $12.8 billion in equity since 2010 at valuations as high as $47 billion, with SoftBank its biggest backer, before going public through a merger with the BowX Acquisition blank-check company in October 2021, Reuters and Forbes reported. The debut valued WeWork at about $9 billion, less than a quarter of its 2019 peak. By late 2023 the stock had lost more than 98% of its value for the year, and on November 6, 2023, WeWork filed for Chapter 11 in New Jersey federal court, reporting total debts of $18.65 billion against $15.06 billion in assets, CNBC reported.

The buyback that wasn't

In early 2024, as WeWork worked through bankruptcy, Neumann moved to buy his old company back, reportedly offering $500 million. It went nowhere: by late May 2024 he conceded the effort would not move forward, the BBC reported, and WeWork's lenders had judged his offer too low, preferring to convert their debt into equity. He built the company, left with a nine-figure exit, then found his bid to buy it back simply wasn't big enough. A US bankruptcy judge approved the restructuring on May 30, 2024: Yardi Systems took a majority stake, SoftBank stayed on as a backer, and a group of lenders took the rest, wiping out about $4 billion of WeWork's debt.

These days Neumann is back in real estate. In 2022 he launched Flow, a residential venture that raised $350 million from the Silicon Valley firm Andreessen Horowitz, the Guardian reported - a brand-new company funded for less than the sum he could not muster to win back the one he actually built.