Adam Neumann of bankrupt WeWork is a billionaire by net worth
American office space and coworking company WeWork filed for Chapter 11 bankruptcy on November 6, 2023. However, this did not affect the net worth of its most famous co-founder and former Chief Executive Officer (CEO) – Adam Neumann.
WeWork was founded in 2010 by Neumann and Miguel McKelvey. The company quickly gained attention and Newman gained a fortune on the back of his “sexy” image. But WeWork was also plagued by his rampant spending and general mismanagement.
Commenting on the company’s downfall… BBC He said it was “a story of brutal egos, fickle ambition and a gullible public.”
according to luckWeWork had liabilities of US$19 billion and assets of US$15 billion at the time of its bankruptcy filing. Its long-time backers, including Japanese investment group SoftBank Group Corp and its venture capital arm Vision Fund, face major losses.
Although his company is faltering, Newman has nothing to worry about. He’s still a billionaire, and likely will remain so if he’s learned lessons from his time at WeWork.
Adam Neumann and WeWork: The formation is about to collapse
WeWork grew out of a company called Greendesk, which Neumann created in 2008 when he convinced a landlord to lease some floors of a building.
According to the BBC“He offered free fair trade coffee and celebrated kibbutz-style communal living.” A kibbutz refers to a collective farm or settlement in Israel. Newman, an American of Israeli descent, grew up on a kibbutz before coming to New York in 2001.
As Greendesk quickly gained popularity, it received a US$15 million investment from a real estate developer and changed its name to WeWork with Neumann as its CEO.
As of January 2019, WeWork was valued at US$47 billion. WeWork has continued its expansion spree, spreading its network to more than 20 countries over the course of its dizzying rise. Newman has been dealing with celebrities like Drake and Ashton Kutcher, the latter of whom is a tech investor himself.
But after the peak and all the glitz and glamor came autumn.
WeWork was scheduled to launch its initial public offering (IPO) when Neumann stepped down as CEO in September 2019. This came after critics noted irregularities in the IPO paperwork the company filed in December 2018 as We Company.
the BBC The report notes that authorities discovered much larger losses than initially estimated as well as a “strange relationship between the company’s finances and Newman’s own finances.”
a CNBC The report says there were self-dealings, such as the sale of the “We” trademark for $6 million in stock, which Newman later returned.
The IPO was withdrawn, and the company’s value fell by approximately US$40 billion soon after.
SoftBank, WeWork’s largest shareholder, saved the company from complete collapse by offering to buy $3 billion worth of shares from Neumann after the IPO failed. Newman was to personally receive US$1 billion from the deal.
But SoftBank tried to pull out of the deal in April 2020. That meant a loss
Neumann sued SoftBank and in February 2021, they reached an agreement under which he was awarded US$480 million and an additional US$50 million to cover legal fees.
In October 2021, this time under new management, WeWork found a break. This came in the form of a special purpose acquisition company (SPAC). As part of the SPAC, WeWork merged with blank check company BowX Acquisition Corp. It went public on the New York Stock Exchange (NYSE) at a valuation of US$8 billion.
Today, after WeWork filed for bankruptcy protection, it is worth just $45 million — more than a thousand times less than its peak value in January 2019.
“As the co-founder of WeWork who spent a decade building the company with a great team of people with specific goals, the company’s anticipated bankruptcy filing was disappointing,” Adam Neumann said in a statement. CNBC After declaring bankruptcy.
“It has been difficult for me to watch from the sidelines since 2019, as WeWork has failed to capitalize on a product that is more important today than ever before. I believe that with the right strategy and team, the reorganization will enable WeWork to emerge successful.”
Adam Newman’s net worth and how he is still a billionaire
While WeWork is now in the prospecting phase, Neumann appears to have nothing to worry about.
Forbes It is estimated that his real-time net worth as of November 8, 2023 is US$2.2 billion. Bloomberg Billionaires Index He pegs this number at US$1.7 billion.
Although it’s less than half what it was at WeWork’s peak in 2019, Neumann is still in a strong position. He still owns approximately 10 percent of the company’s public shares after selling $1 billion of his stock at the time of his departure when the company was private.
He also made millions while involved with WeWork. according to luck, his name was mentioned 197 times in a merger filing along with “stunning payments.” These agreements included a $185 million non-compete agreement, a $106 million settlement payment, and $578 million received in exchange for shares sold by Neumann’s subsidiary We Holdings to SoftBank.
There was also a US$432 million loan made by SoftBank to Neumann, which was secured by part of his stake in WeWork, which is now worthless.
He received a “consulting fee” of $46 million from SoftBank while at the company. Gizmodo It was reported in November 2019 that the WeWorkers Alliance, a non-union group of company employees who were severely affected by Neumann’s actions in mismanagement of the company, claimed in an open letter that the amount the former CEO was paid was more than Neumann was paid. Salaries of almost all CEOs of public companies in the United States in 2018.
Neumann’s net worth was approximately $2.3 billion when WeWork went public in October 2021. A third of that net worth was on the back of his WeWork shares. The value of the shares has now fallen by more than 99 percent, meaning they are worth nothing.
Neumann acted quickly and smartly after exiting WeWork. He acquired majority stakes in residential buildings valued at approximately US$1 billion before debt.
He runs residential real estate startup Flow, which venture capital giant Andreessen Horowitz valued at more than $1 billion in 2022. He has also been reported to be behind blockchain-based carbon credit trading startup Flowcarbon.
Assets owned by Adam Newman
Adam Neumann reportedly spent his money lavishly in the real estate market while with WeWork. according to Interested in tradeHe owns at least five properties worth US$80 million. Most of them are in New York State.
Among them is a house in the Hamptons, which he bought for more than $1.7 million in 2012. The Hamptons boasts celebrity homes such as those of Jimmy Fallon and Gwyneth Paltrow.
Two years later, he purchased a six-bedroom, five-and-a-half bathroom townhouse in New York City’s Greenwich Village for $10.5 million in 2014. The townhouse was originally built in 1847.
He added another New York property in 2016, Linden Farm in Pound Ridge, Westchester County. The property is spread over an area of 0.2 square kilometers and has a house of 1271 square metres. The house has eight bedrooms and several bathrooms. The property has a horse stable among many other amenities and features, including proximity to 18.2 square kilometers of conservation land.
Newman purchased four units, including a duplex penthouse, in a seven-story townhouse in Gramercy Park in New York City for US$34.7 million in 2017.
His last known real estate purchase and the only known property outside New York is a 1,207 square meter property in the San Francisco Bay Area purchased for US$21 million in 2018.
One of his most talked about possessions was a Gulfstream G650ER private jet, which WeWork purchased for US$60 million for his use. He used the plane to fly around the world, hold business meetings in the air, and travel with his family.
according to Interested in tradeThe plane has become a symbol of extravagant spending at WeWork. It was reported in early 2020 that WeWork had put the plane up for sale following Neumann’s departure from the company and the problems it was embroiled in by then.
(Hero and Featured Images: Shahar Azran/Getty Images)
Frequently asked questions:
How much is Adam Newman worth?
Adam Neumann’s net worth, as of November 12, 2023, is between $1.7 billion and $2.2 billion.
– How much does Adam Newman earn annually?
It is not clear how much Adam Neumann earns annually as of 2023. However, he received a consulting fee of US$46 million from SoftBank when he was working with WeWork.