Mark Lennihan / AP
WeWork co-founder Adam Neumann relinquishes his position as CEO due to problems with the company's initial public offering. The company's valuation, which was once estimated at $ 47 billion, has reportedly fallen to less than $ 20 billion and the IPO has been postponed.
Neumann was a charismatic but controversial personality. He built a worldwide network of office space used by half a million entrepreneurs and businesses. He has also criticized his strict control of the company and some unusual steps to enrich his business.
Neumann confirmed the controversy in a statement Tuesday announcing his resignation. "The control against me has become a major distraction, and I've decided that it's in the company's best interests to step down as CEO," he said.
The company announced that Neumann will retain its title as non-executive chairman. Artie Minson, the company's co-president and chief financial officer, and Sebastian Gunningham, his vice chairman, have been named co-CEOs.
WeWork has become synonymous with co-working space as the company expanded to more than 100 cities around the world.
Investors, however, saw two major problems: Neumann had too much control – he controlled the majority of the shares and had the power to override any decision – and he was involved in a series of conflicts of interest.
In some unusual steps, WeWork Neumann lent several hundred million dollars and sold hundreds of millions of dollars worth of equity as the company prepared for the IPO.
In another controversial move, Neumann tagged the word "We" and sold the rights back to WeWork for about $ 6 million. Joey Low, one of WeWork's largest and earliest investors, said the move was "tasteless".
"If you are the boss of a big company, you do everything in your power to make your business a success," said Low.
Neumann later returned the money to storage.
Low said he initially intended to invest little money in WeWork, but then pocketed millions of his personal assets solely because of Neumann's character and vision
"It was like that Pied Piper, "said Low. "He would play on his flute and people would just follow him."
Low said he still believed in the company and this vision. He says that this model of building offices, where people can sublet space and be part of a community, is still promising.