The value of WeWork has dropped to only $ 2.9 billion in the context of the raging Covid-19 epidemic, making business more deadlocked. It is worth mentioning that this was one of the leading startups in the world.
The latest value of WeWork is revealed by Softbank, the largest investor here. Earlier in late September last year, the company was valued at $ 7.8 billion after a series of concussive scandals. However, in its most glorious period, around mid-2019, WeWork was valued at $ 47 billion, the most valuable startup in the United States.
At the time, at a market capitalization of $ 47 billion, former CEO Adam Neumann said he didn’t just want to make a lot of money from an office-sharing service. Neumann’s ambition is to “change the world”. Because WeWork is a symbol of recklessness that seems to exist only in Silicon Valley, of a business model that seems to transcend all economic laws.
However, in the morning, when thousands of investors and financial reporters first read the financial information of WeWork to determine whether the office-sharing company is going smoothly on the path to total domination. demand and make huge profits as Neumann asserts or not.
Immediately chaos broke out. The articles were flooded with articles reflecting WeWork’s poor business results and the bizarre management style of CEO Neumann.
Within 33 days, WeWork’s market capitalization dropped by 70% and Neumann resigned as CEO, his dream of becoming the first US $ 1,000 billion billion billionaire broke. There have even been reports that WeWork is facing bankruptcy.
Softbank as the largest investor here decided that it would continue to spend money to save the company. Following that, the Japanese giant took control of WeWork and pushed co-founder Adam Neumann out of the company. Billionaire Masayoshi Son is confident that the closure of unprofitable businesses and the suspension of expansion will help generate profits. However, these commitments were completely destroyed by the Covid-19 epidemic.
WeWork currently has to reduce prices for some customers as the company allows employees to switch to work from home to avoid the spread of Covid-19. WeWork has not yet paid the April rent for a number of landlords and is working hard at negotiating with rental units to find a way to fix it.Softbank is currently in trouble with a legal battle with Neumann after he sued. The company forcibly gave up a deal of $ 3 billion to buy shares from him and other shareholders as part of a bailout.
Not only that, Neumann even sued Softbank in court, accusing the group and the Vision Fund of failing to comply with the stock repurchase agreement from him and some other shareholders as part of a bailout package.
However, Soft Town director Rob Townsend described the allegations as “worthless”. “Under the terms of the agreement Adam Neumann signed, Softbank has no obligation to fulfill the offers.”