WeWork founder Adam Neumann’s voting power curbed

WeWork founder Adam Neumann's voting power curbed

Office space company WeWork says it is changing its corporate structure in a bid to allay investor fears that have put its stock market debut in doubt.

Its parent firm, the We Company, said it was reducing the voting power of founder and chief executive Adam Neumann, among other changes.

The move comes amid signs of weak demand from outside investors.

WeWork had been seeking a valuation of about $47bn (£36bn), but reports say this could fall to as low as $15bn.

SoftBank, the Japanese investment firm that owns about 30% of WeWork, has reportedly urged the property company to drop its flotation plans.

A lower valuation would be a blow to SoftBank, forcing it to write down its investment.
We Company said Mr Neumann would retain majority control, but his superior voting shares would now only be worth 10 votes each instead of 20.

He will also be prohibited from selling more than 10% of his shares in the second and third years after the flotation.

No member of Mr Neumann’s family will be on the firm’s board, while any successor will be chosen by the board.

This chiefly affects Mr Neumann’s wife Rebekah, who co-founded the firm.

SoftBank chief Masayoshi Son has praised WeWork, arguing that its profitability will surge after a period of loss-making expansion.

But critics say WeWork’s model could leave it vulnerable during an economic downturn.

Trademark issues
The company rents office space for the long term, sub-letting that space to firms and individuals on more flexible lease terms. That could leave it liable for lease payments if it is unable to find tenants.

WeWork had also faced questions about its complicated financial ties to Mr Neumann.

Last week, Mr Neumann returned $5.9m worth of stock to the firm, which he had controversially received in exchange for his trademark of “We”.

Since WeWork’s start in New York in 2010, it has expanded to more than 500 locations in 111 cities across 29 countries.

The growth has been costly. WeWork lost about $1.6bn last year, despite revenue nearly doubling.

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