Of all the White Knights out there to potentially save WeWork I did not have WeWork’s co-founder Adam Neumann on my bingo card.
That’s exactly who has popped up and is trying to put together a deal that would allow his new company, called Flow Global, to buy WeWork out of bankruptcy. To finance a deal he’s partnering with Daniel Loeb’s hedge fund Third Point.
So far, things aren’t off to a good start.
According to Adam Neumann’s lawyer Alex Spiro of Quinn Emanuel, WeWork hasn’t been very responsive to their inquiries, saying “We write to express our dismay with WeWork’s lack of engagement even to provide information to my clients in what is intended to be a value-maximizing transaction for all stakeholders.”
It seems WeWork is more focused on trying to address their current issues instead of looking for someone to acquire them.
According to a statement by WeWork, they routinely receive “expressions of interest and review them to align with the best interests of the company.”
They go on to say “We continue to believe that the work we are currently doing – addressing our unsustainable rent expenses and restructuring our business – will ensure WeWork is best positioned as an independent, valuable, financially strong and sustainable company long into the future.” according to the statement.
Now an an attorney for WeWork is saying the company may need to take out a new bankruptcy loan to help it get through this rough patch until they are able to successfully renegotiate their rent obligations in order to put the company on a better financial footing.
To show you how bad things have gotten for WeWork, when they were filing for bankruptcy they had debts of $2.9 billion as of June 2023, and more than $13 billion in long-term leases” against $844 million in revenue for their June 2023 quarter with a loss of $397 million.
At the height of their fame WeWork had raised roughly $7 billion dollars in funding, and almost went public at a valuation of $47 billion dollars. Then things fell apart, and their IPO was scuttled. WeWork eventually did go public via a SPAC merger with a sketchy sounding company BowX at a valuation of only $9 billion dollars.
It’ll be interesting to see how WeWork’s bankruptcy story turns out, but if history is any indicator I’m guessing there’ll be more twists and turns now that Adam Neumann has gotten involved.
