Neumann’s back! Founder Adam Neumann is trying to “purchase [WeWork] or its assets” out of bankruptcy, according to a letter from Neumann’s attorneys.

Meet the New Founder, Same As the Old Founder

Neumann built WeWork from the ground up, but his overspending and self-dealing tanked the company’s 2019 IPO. The startup finally succeeded in going public two years later at a much lower valuation.

Neumann’s attorneys claim that WeWork has been unwilling to share financial information that would help in a financing or takeover. WeWork’s management may be wary of letting the controversial founder back into the fold.

As DealBook put it:

It’s unclear whether WeWork’s stakeholders would be comfortable selling the company back to the man whom some of them see as helping to create its troubles.

Neumann Wants WeWork More Than Anyone Else

Neumann is a loose cannon. But who wants WeWork more than him?

For Neumann, this is unfinished business. In 2019, he was pushed out of the company he started and left for Israel, his childhood home.

But shortly thereafter, Neumann bought over $1 billion in apartments across the Sun Belt, later announcing a new startup, Flow. At the same time, Neumann announced $350 million in funding from a16z.

It’s unclear how much of that money Neumann has left 18 months later. But between Flow’s bank account and whatever he can raise from institutions, Neumann should be able to submit a compelling offer for WeWork.

What’s the Alternative?

Does anyone else want this thing?

WeWork is drowning in debt. The company is losing over $100 million a month according to its latest quarterly report.

Above all, WeWork needs to renegotiate leases in order to become a viable business. The company’s footprint is too large, and many of the agreements were signed at the peak of the market.

But lease renegotiations aren’t making much progress. Indeed, landlords have complained that WeWork hasn’t been responsive to their inquiries, according to the Financial Times.

The bottom line is WeWork is almost broke and needs to buy time. And love him or hate him, Neumann is there, cash in hand.

Wrap-Up

Last July, I predicted that Neumann would try to buy WeWork. The iconic brand, low price and personal history made that a pretty easy call.

Neumann wants the deal. But WeWork needs it desperately.

Despite his flaws, bringing Neumann back is the best outcome for WeWork. Without the founder, it may not survive much longer.

Should WeWork sell to Neumann? Leave a comment and let us know!

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