Adam Neumann abandons WeWork buyback

Adam Neumann has officially admitted defeat in his bid to buy back WeWork, ending his attempt to take over the co-working company, which he helped found in 2010 and turn it into a $47 billion global enterprise before it went bankrupt last year.

“Over several months, we have tried to work constructively with WeWork to create a strategy that will allow it to thrive,” Mr. Neumann said in a statement to the DealBook newsletter. “Instead, the company is looking to emerge from bankruptcy with a plan that seems unrealistic and unlikely to succeed.”

The writing has been on the wall for weeks. Mr. Neumann stepped down as WeWork’s CEO in 2019 under pressure from managers and investors, after the company failed to go public amid questions about its business model and corporate governance. It was a stunning downfall for Mr. Newman, the company’s charismatic leader.

But last February, DealBook reported that Neumann was planning a bold move to buy back the company.

His new real estate company, Flow, backed by venture capital firm Andreessen Horowitz, has introduced… More than $500 million. The plan was to buy WeWork or its assets, and inject bankruptcy financing to keep it afloat.

But WeWork found a different lifeline. US bankruptcy judge last month Agreed to the restructuring deal This erased $4 billion of the company’s debt. It also included $450 million in new financing from SoftBank, the Japanese technology investor that has backed WeWork since its early days, enabling it to emerge from Chapter 11 bankruptcy.

WeWork has been busy renegotiating its leases in an attempt to get rid of it $11 billion lease liabilities. The rise of hybrid working since the coronavirus pandemic has hit the commercial real estate sector hard. The increase in vacancies has helped companies like WeWork rework their deals with landlords, but it has also cast doubt on the growth potential of the coworking business model.