CONFIRMED
WeWork and the $47 Billion Office Company That Wasn't a Tech Company
Adam Neumann walked barefoot through New York, flew on a private jet stocked with tequila and marijuana, and told people he intended to become the world's first trillionaire, to live forever, to solve the problem of homelessness, and to 'elevate the world's consciousness.' His company, WeWork, was — when you stripped away the mysticism — a business that signed long-term leases on office buildings, fitted them out with exposed brick, free beer, and communal sofas, and rented the space back to startups and freelancers on short-term, flexible terms. It was, in plain terms, a commercial real-estate company. But Neumann did not sell it as one. He sold WeWork as a technology company, a community, a movement, a 'physical social network' that would transform how people worked and lived; and Silicon Valley, awash in cheap money and hungry for the next world-changing platform, believed him. Backed above all by the Japanese conglomerate SoftBank, WeWork reached a private valuation of about $47 billion by early 2019, making it one of the most valuable startups in the world. Then, in the late summer of 2019, the company filed the paperwork to go public — and the spell broke. Investors and journalists read the prospectus and found enormous losses, an unsustainable business model, bizarre self-dealing by the founder, and governance so lopsided it bordered on absurd. In about six weeks, WeWork's valuation cratered from $47 billion toward single-digit billions, the public offering was abandoned, and Neumann was pushed out. Unlike some of its fellow cautionary tales, WeWork was not a criminal fraud — no one went to prison. It was something subtler and, in its way, more revealing: a legal, dazzling demonstration of how cheap money and a magnetic founder can inflate a fairly ordinary business into a fantasy, and how fast the fantasy can pop. This is the story of how that happened.
