Adam Neumann's back being a Billionaire. Cold or Cool?
Neumann is reported to be walking out with $1.7B net worth from the deal with Softbank.
Softbank will be paying him a "consultation fee" of $185M.
Adam may be forgoing his 18% stock to Softbank for the $970M value
All this with a $500M credit line to help pay offs debts. (Mostly to JPM)
Meanwhile the alleged report of Adam cashing out from the We company and buying property to in-turn long-lease them out to WeWork is still under scrutiny.
All of this chaos while WeWork lays off over 2,000 employees
Is Adam a great entrepreneur or a cold money chaser?
I hate 'Adam'.
If you think about it this way: He is earning $850,000 for every employee that is laid off.
Woahhh!
He created those jobs in the first place...
No he didn't. His creditors and investors created those jobs. So far, he has yet to create a single penny of wealth. Usually, billionaires are made by creating wealth; therefore, no one is worse off as a result of a man becoming wealthy off of voluntary transactions. In this instance, Nuemann became a billionaire by destroying wealth, using his terrible mismanagement as leverage to hold investors hostage to force them to give him money. It's completely backwards. Neumann scammed Softbank, which has scammed its own investors.
I think he is a hero!
Agree with m_1, this industry did not even properly exist before he hired them.
What about all those jobs he created in the first place? and all that potential he gave thousands of startups?
This is a straight-up demonstrable lie.
Lmao....what? Can you explain this pls
...? Regus has been around for a long time. Google tells me 1989 and I'm not even sure they were the first.
Regus has been around, and unlike WeWork, they have seen a recession. From their 2002 report: - "It became clear early in 2002 that Regus had over expanded in some markets" - "In 2001, we had already cut costs by over £50 million a year but with overall revenues continuing to fall in 2002" - "Notwithstanding this, we continued to consume cash month-on-month."
http://assets.regus.com/investors/annual-reports/2002/2003.06.04-regus-…
-Wealth was not created it was destroyed. -Funds where given to Neumann so he could grow them through his business -W/ that wealth Neumann financed his operations which included the creation of these new jobs -Neumann's company ended up being shit and ended up consuming said cash w/o turning it into a profit -W/ a negative balance Neumann is force to terminate jobs and what's more he gets billions in compensation -Thus wealth was in this case was drenched in oil and burned to a crisp
Your argument about wealth being given to startups doesn't make sense. Lets say I give you $10, you shove $8 up your ass and give $2 to another person. Would you say value was created or destroyed?
He became a billionaire on his own merit.. that should say something. There is also quite a bit of luck involve but no self made billionaire accumulates that wealth through pure luck.
How do we define "merit" today? Building a business that loses money and has no prospects of ever making money? Neumann loses more money in an hour than most people will make in a year.
It’s kind of a sign of our times that all you have to do to get rich and famous is:
It’s more like, Softbank is a real soft
Softbank to Neumann:
This old Shitfisher took his bagpipes down to the river and he played his pipes in hopes that the shitfish would rise up out of the water. But not one shitfish rose, Julian. So he took a shitnet and threw it in the river and, lo, soon he drew it forth filled with shitfish. Then he took his bagpipes and then he played them again and all the shitfish jumped up in the shitnet. "Oh, you dance now when I play, said the Shitfisher.' And then the little old shitfish spoke up in the end and he said, when you're in a man's power, you must do as he bids you. Shitnets, Julian, and Shitpower.
This is fucking hilarious. Did you make that up yourself or is that floating around somewhere on the internet?
Is there a reason no one is suing this idiot? I'm pretty sure he has done something sketchy that can warrant a lawsuit. Why pay him??? What's happening to the world.
What has he done that is illegal or even fraudulent? While a lot of the things he was doing weren't the best practices for building a sustainable business it isn't like he was hiding his actions from people. SoftBank was dumb enough to value the business at 47 billion. That isn't his fault.
Guys like him have done plenty of illegal and/or fraudulent stuff. Hell, everyone has done at least one illegal thing in their lives. I can't personally tell you as I'm obviously not on the inside, but it's America, people sue for all sorts of stupid shit. I'm just surprised it wasn't considered at all. I'd rather attempt to sue for literally anything than pay him over $2BN for no reason.
I'm not sure if he had a fiduciary responsibility to his investors; if he did, he clearly violated it on endless occasions of self-dealing. I do agree, however, that suing him would be of no benefit. He doesn't have enough capital to recover to even make a difference. Where I fault Softbank is giving him nearly $2 billion to go away. That's downright insane.
And the fact that they were willing to pay him 2 billion instead of filing a lawsuit doesn’t tell you that they didn’t have any evidence of fraudulent behavior? Says it all if you ask me.
Have you considered that SoftBank and anyone at the firm involved in this is (obviously) mentally impaired?
What is more likely, every single person that has decision making power at SoftBank and has been intimately involved in this deal either never thought to file a lawsuit, but you did? Or the people that are involved in the deal weighed the pros and cons of doing so, while taking into account his behavior throughout this process, and decided that paying him out made the most sense?
You are implying that despite not working at SoftBank you know more about how to handle this than they do.
Pitchbook’s Kevin Dowd did an interesting piece this past weekend on WeWork, entitled “WeAreAlmostOutOfMoney” touching on how WeWork’s on-track to run out of cash by mid-November, with their board and new co-CEOs on the hunt for additional funding.
SoftBank’s reportedly offering $5B in financing to save them from bankruptcy, and JPMorgan Chase, which has also reportedly put together a rival $5B debt package for the company. According to Bloomberg, there are doubts about the feasibility of JPM's proposal, due to skepticism over WeWork's ability to service such a large new debt commitment. And considering WeWork lost just shy of $2B last year, that seems extremely plausible.
It’s all bananas to me, and not even the silver kind… I mean you’re talking about SoftBank's of having invested more than $15B in a company that's now worth barely half that, and yet Softbank isn’t a major stakeholder, so all that and yet no true control over WeWork.
Well aren't they (Softbank) trying to buy out more and more investors's shares? Starting with the 18% or so from Adam...
Yes^ Once this deal is complete. This would officially make the biggest severance for a private company
To all the people saying why isn’t Softbank suing:
At this point Softbank is too invested in the company to risk a lawsuit and have the negative publicity destroy whatever is left of the company (which isn’t much).
The lawsuit would also likely dig up details that would show just how stupid / incompetent Softbank may or may not have been when giving Adam billions of dollars for good feelings.
That’s why there’s that saying, if you owe a bank a few thousand, they’re your creditor. If you owe them half of their loan book, they’re your best friend.
Adam obviously knew this, and frankly, company founders who own multiple vote shares are playing this game at some level.
If you want to maintain power over someone / some organisation, you can’t tie your fate too closely to theirs.
It’s not just money too. Softbank is dangerously veering on becoming a laughing stock if they let this implode.
It’s cheaper to pay Adam to go away. You think he wouldn’t have the shamelessness to ask for more money? He probably did. The reason he probably took the package is because they threatened to sue him otherwise.
Carrot and stick
As one of the people questioning the lack of a lawsuit, this was beautifully explained. +1 SB.
Fun fact:
Softbank put in more money into WeWork than Bolovia's GDP
So much talk and frustration about Neumann, while he's probably partying on a private Island.
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