WeWork's public debut looks even more tenuous with CEO Adam Neumann's future in question.
Major investor Softbank's CEO, Masayoshi Son, is reportedly in favor of ousting the longtime chief executive. WeWork's IPO had already come under fire on concerns over heavy losses and Neumann's concentrated voting powers.
Four experts weigh in on what it means for WeWork's future.
Kamran Ansari, venture partner at Greycroft, says this situation is different from when Uber ousted founder and former CEO Travis Kalanick.
"You can't push [Neumann] out. You have to put him in the chairman seat, give him the president title, bring in someone else. … It's a different situation because of the control that he has over the voting stock. So I think unless you want to go totally nuclear, and again, that was at Uber over a year or two before they were thinking about going public. This is on the eve of going public. And this is all playing out."
Charles Elson of the John L. Weinberg Center for Corporate Governance says the control Neumann has over the company is problematic.
Early investors "allowed it to happen, and they are now responsible for it. That's the whole issue. The issue isn't what he's done with it. The fact is he had it to begin with, but there are there a lot of companies that have it, and a lot of these potential issues will come up there, too. ... I think this hopefully is the catalyst that gets people to say, 'Enough,' because you see how it played out to its irrational end. And that's what we're seeing. There's nothing you can do."
Walter Isaacson, advisory partner at Perella Weinberg Partners, says it makes sense to keep Neumann in the role for now.
"He's the right person right now to launch a company that's going to be transformative. He does need, as a lot of people did, whether they were founding Google or Apple or Facebook, sort of what they used to call adult supervision on Wall Street, and he's probably not the person to be the long-term CEO. But if you're going to create a whole new industry based not just on real estate sharing but on a notion of how we're going to co-work together and co-learn and do other things together in the future, I don't think you can build it without a visionary.
Geoff Lewis, founder of Bedrock Capital, says Neumann has become an unlucky target within a much larger problem.
"I think it's a sad argument because I think none of these issues are new discoveries. Any private markets investor who's doing the type of diligence that should be done on a business like this would have uncovered these issues before they invested. So of course these issues are now being floated in the press by the investors as they try and make Adam the scapegoat, the fall person for what's just been an overvalued company. Quite honestly the investors made the mistake of investing in the business at too high a valuation. But yeah, Adam is very exposed, and he's handcuffed because the company can't really tell its side of the story, given the SEC restrictions. They really ought to pull the IPO off the table and start telling their side of the story, but I do not like how this founder is being made the scapegoat for the mistakes of the investors."
