Do you remember Adam Neumann? If you do, then you remember WeWork? A company that rents out working offices to business owners and tech giants. The Company being a Unicorn valued at $47 billion dollar on its way to IPO lost everything as people started looking into the company’s offering and the founder Adam Neumann. It is visible that WeWork already pushed out Adam Neumann with a $1 billion goodbye handshake while the investors already got another person to run the company and Softbank saved the day with $8 billion.
What will happen if WeWork, a company that burnt cash and lost its IPO face an economic recession? Due to the current pandemic, a lot of people are working from home and they do not want to get the virus and this has caused the offices of WeWork to be empty and business not going well. Softbank has been known to invest billions of dollars into fintech companies, it did this with Alibaba and many more but last year the company lost $17.7 Billion because of two companies, UBER and WeWork. The company first invested $18.6 billion into the company and Softbank saw WeWork as a good investment until it valuation went from $47 billion to $2 billion. Who will not see a company that lost all its investment as a waste?
The company wanted to help with bailout funds of $8 billion for WeWork but it has changed its decision and will be removing $3 billion from the bailout money it intended to give to the WeWork. WeWork now decides to take legal action against Softbank for deterring on their agreement. The lawsuit is being supported by Adam Neumann the former CEO and founder of WeWork. I thought this guy left? He is filing a legal suit because his $1 billion take home fee will be gotten from the $8 billion bailout and other bailouts from other investors.
The pandemic has been affecting companies like Airbnb, Wework and several real estate companies. WeWork while placing a Lawsuit on his long term investor is also going to be getting sued for charging customers who have not been using their building during this pandemic. Who does this, even after the government already said offices should be closed. WeWork charges customers 70% of the rent and paid 80% of the 70% to the apartment owners.
If this pandemic is over, what will happen to WeWork? A lot of people and companies are starting to see that there is no need for a company space in other to run a very successful company as staffs can work from home, this saving the companies money for logistics and infrastructure. With this, will WeWork be able to get customers again to use their buildings, we the company win its investor in court, will the company overcome customer lawsuit? There are a lot of uncertainty with WeWork and its future after the pandemic.