WeWork’s Billionaire Founder Adam Neumann Quits
WeWork and SoftBank have announced a deal that will see the Japanese tech giant buy out about 80 percent of the beleaguered real estate company WeWork.
The value of WeWork has plunged, more than 2,000 employees are being fired and many investors are nursing losses after the firm’s bailout by SoftBank, but founder Adam Neumann is still a billionaire.
WeWork and SoftBank have announced a deal that will see the Japanese tech giant buy out about 80 percent of the beleaguered real estate company WeWork. The proposed rescue package involves Adam Neumann selling about $1 billion of stock and getting a $185 million consulting fee from the Japanese firm, according to people familiar with the development. According to the deal, Neumann will leave the company’s board though he still can assign two seats.
On these terms, Neumann’s net worth would be at least $1 billion. The Wall Street Journal reported the deal could see Mr Neumann receive nearly $1.7bn as he sells his shares in the company and through other fees.
Neumann sold hundreds of millions of dollars of stock in earlier funding rounds, according to the Wall Street Journal. He also has a $500 million credit line — secured by WeWork shares — from UBS Group AG, JPMorgan Chase & Co. and Credit Suisse Group AG. About $380 million was outstanding as of July 31. JPMorgan too has loaned him $97.5 million.
As the SoftBank deal extends $500 million of credit to Neumann, the $500 million loan will now be repaid, sources said.