WeWork co-founder Adam Neumann agreed on Tuesday to resign as chief executive and give up majority voting control, after SoftBank Group and other shareholders turned on him over a plunge in the US office-sharing start-up’s estimated valuation.
The decision came after WeWork parent WeCompany postponed its initial public offering last week following push-back from perspective stock market investors, not just over its widening losses, but also over Neumann’s unusually firm grip on the company.
This was a blow for SoftBank, which was hoping for We Company’s IPO to bolster its fortunes as it seeks to woo investors for its second $108 billion Vision Fund.
SoftBank invested in We Company at a $47 billion valuation in January. But investor scepticism led to it earlier this month considering a potential IPO valuation of as low as $10 billion, Reuters reported.
We Company had vowed to press ahead with an IPO by the end of the year. But there was little sign that IPO investor sentiment would change, threatening the value of the stakes held not just by outside investors, but by Neumann as well.
The size of Neumann’s holding has not been disclosed