Adam Neumann formally conceded defeat in his attempt to buy WeWork, bringing to an end his bid to acquire the co-working space company that he helped found in 2010 and built into a global business valued at $47 billion before its bankruptcy last year.
“For several months, we have sought to work constructively with WeWork to develop a strategy that would enable the company to thrive,” Neumann said in a statement to the DealBook newsletter. “However, as the company attempts to emerge from bankruptcy, its plan appears unrealistic and unlikely to succeed.”
The signs had been there for weeks: Mr. Neumann resigned as CEO in 2019 under pressure from board members and investors after WeWork’s failed public offering amid questions about the business model and corporate governance. It was a stunning fall from grace for the company’s charismatic leader.
But in February, DealBook reported that Neumann was planning a bold move to buy back the company.
His new real estate company, Flow, backed by venture capital firm Andreessen Horowitz, has offered more than $500 million in investments. The plan was to buy WeWork or its assets and then use bankruptcy financing to keep the company afloat.
But WeWork got another helping hand: A U.S. bankruptcy court last month approved a restructuring plan that essentially wiped out the company’s $4 billion in debt, including $450 million in new funding from SoftBank, the Japanese tech investment firm that has backed WeWork since its early days, helping the company emerge from Chapter 11 bankruptcy.
WeWork is busy renegotiating leases to shave off $11 billion in rent obligations. The rise in hybrid work since the COVID-19 pandemic has hit the commercial real estate sector hard. The surge in vacancies has helped companies like WeWork rework deals with landlords, but it also calls into question the viability of the shared office business model.
