This doesn't exactly inspire confidence in WeWork's (otherwise known as "the We Company") upcoming IPO.
An investigation by the Wall Street Journal has determined that WeWork co-founder Adam Neumann has cashed out more than $700 million from the company using a mix of stock sales and debt.
If that number seems unusually large, that's because it is: CEOs typically wait for their company to go public before cashing out. And though WeWork is still private and doesn't publicize sales of stock by insiders, WSJ's reporters believe that Neumann's cash-out is one of the largest on record for a tech unicorn headed for a public offering.
Neumann remains the CEO of WeWork as well as its single largest shareholder, but the exact size of his holdings in the company now is unknown. As of the end of 2017, a company that controlled Neumann's and his co-founder's stake in the company showed they held a combined 30% of the company, which was recently valued at $47 billion during its latest round of investment in January. The company plans on moving ahead with the listing later this year or early next year, and initially filed confidentially for an IPO late last year.
Of course, such a large cash-out raises questions about the CEO's confidence in the company and calls the lofty valuation for the cash-burning machine that is WeWork into question - particularly given the vulnerabilities built-in to the company's business model that have been highlighted by skeptics. Like Lyft and Uber before it, WeWork's losses have doubled alongside its revenues.
https://twitter.com/jtepper2/status/1151975622933209089https://www.wsj.com/articles/wework-co-founder-has-cashed-out-at-least-700-million-from-the-company-11563481395