By Dominique Jacquet

Endgame for WeWork and perhaps rebirth after a period of “protected” bankruptcy (infamous Chapter 11).

Losses of 2 billion dollars in 2022, for revenues of 3.2 billion, a net debt of 2.7 billion at the end of June 2023 and cash consumption of around 300 million per quarter, the horizon is dark…

The company was the theme of one of the first Ecademy vidcasts in January 2020. After considering an IPO at a valuation of 47 billion, the company had suddenly fallen (the harsh reality of the figures…) and SoftBank had attempted a recovery.

In total, the various entities of the group led by the charismatic Masayoshi Son (SoftBank, SVF, etc.) have, according to their own calculations, invested more than 14 billion dollars in WeWork. An IPO (via a SPAC) allowed us to regain hope by valuing the firm at 9 billion, it is “worth” today around $44M.

Certainly, Masayoshi Son made the operation of his life by purchasing a third of Alibaba’s shares for $100M while the market capitalization will exceed $700bn in 2020… This allows him to build his legend and creates the enthusiasm that leads an Internet user to write in 2018: “Masa is a genius like a Japanese Steve Jobs”. Fortunately for Japan, the country created Akio Morita (Sony) and Iwasaki Yatarô (Mitsubishi). But, a few errors of judgment and a totally centralized mode of governance gradually consumed the Alibaba cake.

Let’s not be too critical of “Masa”, he had invested wisely in Arm and Nvidia, his regret perhaps being having sold his stake for $55 per share when it is listed today for around $500…

The only beneficiary of this saga is the founder of WeWork, Adam Neumann, a particularly questionable character in his personal and economic behavior who personally purchased buildings to rent them to his company on an “advantageous” rental basis… His ouster in 2019 made it possible to build and consolidate its assets estimated at $1.2bn by Forbes in 2022.

He is the big winner of the WeWork saga and the result of significant failures on the part of the firm’s board of directors and its investors.

Note that Richard Fuld had retained his salary of $37M as boss of Lehman Brothers at the time of the explosion. Adam Neumann’s heritage shows that finance has learned a lot from the subprime crisis.

On the other hand, Richard Fuld appears (live or as a “model”) in Too Big to Fail or Inside Job or, again, The Last Days of Lehman Brothers, while Adam Neumann is only the hero of a TV series with explicit title: WeCrashed. It’s less prestigious.