IPO had been one of the most highly anticipated public offerings of 2019. The company’s largest investor, SoftBank, is taking control of the struggling company at a valuation $8 billion. Former CEO and founder Adam Neumann, who will give up most of his stock in the company in exchange for nearly $1.7 billion, including a $185 million consulting fee.

1. WEWORK - THE STARTUP IDEA THAT AIN'T
WORKING
SANTOSH MISHRA
LINKED IN- HTTPS://WWW.LINKEDIN.COM/IN/SANTOSHMISHRA7/

2. COMPANY DETAILS
 WeWork is an American commercial real estate company
 WeWork designs and builds physical and virtual shared spaces and office services for entrepreneurs and
companies.
 Founded in 2010, it is headquartered in New York City
 As of 2018, WeWork managed over 4 million square metres
 WeWork has more than 5,000 employees in over 280 locations, spread across 86 cities in 32 countries
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3. PROBLEM AND PRESENT STATUS
 IPO had been one of the most highly anticipated public offerings of 2019
 The company’s largest investor, SoftBank, is taking control of the struggling company at valuation $8
billion
 WeWork’s peak valuation of nearly $50 billion earlier this year.
 Reportedly, WeWork is so short on funds that it had to delay laying off its staff because it couldn’t pay
their severance packages
 Former CEO and founder Adam Neumann, who will give up most of his stock in the company in
exchange for nearly $1.7 billion, including a $185 million consulting fee
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4. MAJOR REASONS
 Poor corporate governance
 WeWork had a multi-class stock structure that gave Neumann more power than the company’s other
stockholders.
 Some of their stock — usually that which belongs to the founders — has much more powerful voting
rights than others and therefore much more impact when it comes to company decisions- RATIOS 1-10
or 1-20
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5. IPOS WITH MULTI CLASS STOCK
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6. MULTI STOCK OPTION AND OTHER REASONS FOR FAILURE
 Special stock also prevents hostile takeovers by activist investors, who also are often looking for short-
term returns
 The Council of Institutional Investors is calling on stock exchanges not to list companies that don’t have
“sunset clauses” that would dissolve multi-class stock structures within seven years of a company going
public
 Neumann has cited “energy and spirituality” as more relevant metrics for its potential on public markets
than measures of its revenue and losses
 He used his authority as CEO to pay himself $5.9 million for rights to use the new name, a change he had
championed (he later returned the money under pressure of scrutiny before the IPO)
 Declaring Wework Meatfree
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7. WAY FORWARD
 Backed by increasingly risky debt, luring legitimate businesses into an office-sourcing model that could
collapse completely
 SoftBank had the most to lose from WeWork’s more than halved valuation in advance of the IPO
 Neumann’s resignation also gives SoftBank more time to regroup—replacing a CEO will take time, and
the company probably won’t take another swing at an IPO before next year.
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8. INDIAN CO-WORKING SPACE
 Market size of Coworking Spaces in India
 2014 - 0.2 million sq feet
 2016 - 0.7 million sq feet
 2017 - 1.5 million sq feet
 2020 (Expected): 10 million sq feet
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9. SOURCES
 https://www.wework.com/workspace/on-demand/global-access
 https://en.wikipedia.org/wiki/WeWork
 https://www.businessinsider.in/small-business/tech/the-wework-ipo-fiasco-of-2019-explained-in-30-
seconds/articleshow/71319379.cms
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10. THANK YOU
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