When reports came out that WeWork was gearing up to go public, there was a hum of excitement over the entire coworking industry. That buzz quickly turned to concern when the company’s S-1 filing revealed details that were unnerving to both investors and analysts, particularly in regards to Adam Neumann’s business practices.
The prospectus revealed that Neumann had been leasing out buildings he owned back to the company and that his wife, Rebekah Neumann, would play a huge role in finding her husband’s successor.
Due to reasonable backlash it’s underwriters JPMorgan and Goldman Sachs, the company amended many of these problematic practices.
The amendments were not enough, and the company announced it would be postponing its iPO after its $47 billion valuation was slashed to as little as $15 billion.
All of this led to the company’s board and SoftBank’s Masayoshi Son to support Neumann stepping down as CEO, which he then did on Tuesday.
“I think [WeWork] is a pivotal moment for the public markets; you’re going to see a new level of scrutiny,” said Santosh Rao, head of research at Manhattan Venture Partners. “Private companies cannot just throw anything on the public market anymore. There’s a new realization that the easy days are over—and the days of larger-than-life CEOs who can do no wrong are over.”
It is untelling how WeWork can possibly recuperate after its tremendously turbulent path to its IPO, but one thing is certain: Adam Neumann won’t be at the head of it.