WeWork Founder Adam Neumann is reportedly under fire from his own board as the company's progress toward an initial public offering remains in doubt.
After receiving high praise and billions of dollars in investments from SoftBank (SFTBY) CEO Masayoshi Son for years, Neumann may be removed as CEO as soon as this week, according to the Wall Street Journal. Many investors have grown hesitant to invest with SoftBank, WeWork's largest backer. Now the board, with Son's support, is reportedly considering asking Neumann to step down from his CEO post and instead become non-executive chairman of the company. WeWork last raised money early this year in a private round of funding at a valuation of $47 billion but reportedly was considering going public at a value as low as $10 billion, given weak interest in the issue.
Here's who Neumann is.
TheStreet's tech Editor Nelson Wang notes that Neumann was raised in a kibbutz in Israel and served in the Israeli Navy. When he came to the U.S. at 22, he founded a number of businesses, including a co-working precursor to WeWork called Green Desk. When he sold that business, he and his partner used the proceeds to found WeWork, which is aimed at addressing what he perceived as a lack of communal spirit in American offices.
But why is Neumann under such fire from his board?
TheStreet's tech columnist Tiernen Ray noted "Softbank is doing what they have to do to reassure investors in order to hopefully boost the valuation." He added that "the main point of contention is that Neumann's control of the company is egregious."
Specifically, the company's prospectus reveals that Neumann owns some of the properties WeWork leases out, and Neumann's wife is currently allowed to choose his successor if anything tragic happens to him, among other problematic issues.
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