Finance

WeWork Tries to Curb Co-founder’s Voting Power in Move to Salvage IPO

The WeWork IPO is not going to plan and that is not quite clear for everyone to see. Since the start of 2019, there has been a lot of buzz about the range of mega initial public offerings that were going to take place this year. Some of the IPOs that had been the talk of the year were those of Uber, Lyft, Beyond Meat, Pinterest, and WeWork. WeWork was supposed to be another huge event for all those in the startup world and a confirmation that the co-working space renting company was here to stay for the long haul. The SoftBank backed company has been regarded as the next big thing among startups; however, its plans for launching the IPO this month has run into trouble.

The company had been valued at $47 billion earlier this year, but earlier this week, it emerged that it could be seeking a valuation of less than $20 billion in the IPO. Some investors had earlier urged the company to postpone its IPO till the trouble blow over and it seems that WeWork is not ready to take an extreme step to save the offering. A range of executives and investors at the company are now exploring ways in which the voting powers of WeWork founder Adam Neumann could be curbed. In addition to that, the executives also want to remove Neumann’s five Rebecca from having a role in the succession plan at WeWork.

At the point in time, one vote from Neumann has 20 times the voting power compared to votes from other shareholders and sources believe that dilution of that power is necessary to save the IPO. Investors have urged the company to reconsider the IPO and this is a move that could help WeWork in convincing them that it should go ahead. At the end of the day, no investor wants to be held hostage by a founder who has such incredible voting power and it remains to be seen how the whole thing unfolds over the coming days. It is important to note that Adam Neumann is keen to ensure that the IPO should take place and this is possibly a move from him to convince investors that it should go ahead, even at a reduced valuation. The next few days could decide which way all this is going to go.

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Jodie Miller

Jodie Miller is experienced journalist. She holds double degree in journalism and communication. She joined our team as a content curator. She enjoys writing and curating contents related to finance and forex world.
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