Disgraced Adam Neumann spends his days skiing near a $44 million Florida mansion after his startup WeWork collapsed and went bankrupt.
Written by Germania Rodriguez Pollio for Dailymail.Com
14:06 13 November 2023, updated 14:23 13 November 2023
- Newman, 44, bought the two adjacent waterfront properties in 2021
- He and his family are close to Ivanka Trump and Jared Kushner, who live nearby
- The Israeli-American pocketed nearly $1 billion after being ousted as CEO
WeWork may be bankrupt, but its founder Adam Neumann and his wife are living the sunny life in South Florida, where he now spends his days skiing and looking for new investors.
Neumann, 44, bought the two adjacent waterfront properties in 2021 for $44 million — just weeks after he was fired from WeWork and handed a golden parachute worth nearly $1 billion under accusations of mismanagement and fostering a toxic work environment.
The company has since declared bankruptcy, but Newman and his wife Rebecca, Gwyneth Paltrow’s cousin, are living peacefully in Bal Harbour, just 10 minutes from their friends and fellow New York City exiles Ivanka Trump and Jared Kushner.
The Israeli-American and his family have become a major presence in the affluent area’s Jewish community, and he’s often seen skating and socializing — and he’s still looking for investors for his next idea, as the New York Post reports.
Newman is said to be promoting a new, world-changing idea around Miami, saying it will reshape how people live at home as he claims “I’m a creator, not a destroyer.”
“Adam is skating all the time, all over town, taking work calls. Everyone runs into him — he’s very friendly. He stops and talks to people,” a source told the outlet.
While Newman worked the town looking for investors, Rebecca, 45, reportedly kept a low profile and looked after her six children.
The properties, totaling 50,000 square feet, offer multiple slips at the marina. As part of the deal, Newman received a $1 million allowance for the unfinished building.
At the time of the purchase, Newman said one of the parcels would be used to build a 14,000-square-foot home. The other parcel was an empty lot. Together, the two hug 360 feet of coastline.
Neumann was once seen as a star in the business world, but his reputation is in tatters after investors rejected his tequila-fueled management style and antics, derailing plans for a 2019 IPO.
While Neumann’s investors were willing to entertain his eccentricities after he co-founded WeWork in 2010, his freewheeling ways and party-filled lifestyle came into focus once he failed to launch the company’s IPO.
Neumann oversaw one of the biggest business collapses in modern history, after WeWork’s valuation fell from $47 billion in early 2019 to less than $8 billion later that year.
In all, the company raised about $11 billion from investors to build a company that is still worth less than that today.
The company offers shared office space, internet access, a cleaning service and a reception desk, making it popular with small businesses and technology startups.
They have been dogged by rumors of the company’s bankruptcy for some time, after regulators were told there was “substantial doubt” about their ability to stay in business over the next year.
Shares of the flexible workspace provider fell 32 percent in extended trading after The Wall Street Journal first reported the news. They’re down nearly 96 percent this year.
WeWork said last month that it had entered into an agreement with creditors to temporarily defer payments on some of its debts, as the grace period nears the end.
The company’s net long-term debt stands at $2.9 billion as of the end of June and more than $13 billion in long-term leases, at a time when rising borrowing costs are hurting the commercial real estate sector.
It was a stunning reversal of fortune for the company, which was privately valued at $47 billion in 2019, and a black spot for investor SoftBank, which sunk billions.
The company has been in turmoil since its plans to go public in 2019 collapsed after investor doubts about its business model of taking out long-term leases and renting out short-term and concerns about its heavy losses.
WeWork’s problems did not subside in subsequent years. It was finally able to go public in 2021 at a much reduced valuation. Its main backer, Japanese conglomerate SoftBank, spent tens of billions to support the startup, but the company continued to lose money.
The company raised “significant doubts” about its ability to continue operations in August, with several senior executives, including CEO Sandeep Mathrani, leaving this year.
Since exiting WeWork, Neumann has been trying to gather support for his startup Flow, which promises to build “rental communities that foster a sense of ownership and community.”
He claimed that the company will change how people interact with their homes and give them a sense of ownership even though they are renters.
To drive home the point, he said tenants would flush their own toilets instead of calling tenants.
A timeline of the rise and fall of WeWork
2010: Israeli-born Adam Neumann and American-born Miguel McKelvey founded WeWork with its first co-working location in Manhattan’s Soho neighborhood.
2014: After rapid expansion, WeWork is valued at US$4.6 billion, with investors including JP Morgan Chase & Co, T.J. Rowe Price Associates, Wellington Management, and Goldman Sachs Group.
2016: Fortune magazine warns that WeWork faces enormous challenges, writing: “For WeWork to live up to its $10 billion valuation, it faces the daunting task of expanding like a software company — but with people, long-term leases, and office furniture.”
2017: SoftBank made its first investment in WeWork, in a massive $4.4 billion financing round, valuing the company at $20 billion.
2018: The company prohibits employees from purchasing meals that contain pork, poultry or red meat for environmental reasons. WeWork is also purchasing a $60 million private jet that Neumann enjoys using frequently.
January 2019: SoftBank is injecting an additional $2 billion in financing at a $47 billion valuation. SoftBank’s total investment in WeWork now stands at $10 billion.
August 2019: WeWork has issued a prospectus for its initial public offering, revealing for the first time the extent of the company’s losses. Analysts express doubts about the company’s true value and corporate governance.
September 13, 2019: WeWork announces changes to the company’s management, including the board’s ability to choose any new CEO despite Neumann receiving majority voting rights.
September 17, 2019: We Company, WeWork’s parent company, has decided to postpone its IPO until the end of 2019.
September 24: 2019: Facing backlash over its aborted IPO, WeWork announced that Neumann would step down as CEO. The company also offers its private plane for sale.
October 14, 2019: Reports indicate that WeWork has warned customers that nearly 1,600 office phone booths in some of its North American offices are contaminated with the carcinogen formaldehyde.
October 16, 2019: Facing a cash crunch that threatens to send the company into bankruptcy, WeWork’s board of directors forms a committee to explore a financing lifeline.
October 22, 2019: WeWork’s board approves a $9.6 billion lifeline from SoftBank, which allows the Japanese company to effectively take control of the startup. As part of the deal, Newman will resign from the board and give up his voting rights. SoftBank CEO Marcelo Claure has been named CEO.
May 4, 2020: Neumann is suing SoftBank for reneging on a $3 billion bailout for the struggling startup he co-founded. The tender offer was part of a $9.6 billion rescue financing package that SoftBank agreed with WeWork in October that gave it control of the company. Since then, WeWork’s occupancy rates have declined amid the COVID-19 pandemic.
May 19, 2020: SoftBank values WeWork at $2.9 billion. CEO Masayoshi Son says the largest investment firms “have a relatively good chance of passing through the coronavirus valley.” The exception is WeWork.
June 3, 2020: Investors who bought WeWork shares in the months before the failed IPO have filed a class-action lawsuit against both WeWork and SoftBank, alleging that WeWork downplayed losses and overstated its business plan. McKelvey announced his departure shortly after.
(tags for translation) Adam