| 18.6°C Dublin

WeWork's Neumann hit with 97pc drop in fortune

Close

Co-founder Adam Neumann

Co-founder Adam Neumann

Co-founder Adam Neumann

WeWork co-founder Adam Neumann has a new title: ex-billionaire.

SoftBank Group's decision to scrap an October agreement to buy $3bn (€2.8bn) of WeWork stock means the former CEO's fortune has plummeted 97pc to $450m in less than a year - wiping away $13.5bn of his estimated net worth, according to the Bloomberg Billionaires Index.

Because the deal collapsed, Mr Neumann will not be able to sell as much as $970m of stock in the co-working company. The agreement had already drawn scrutiny even before the coronavirus pandemic routed markets.

While SoftBank's decision leaves Mr Neumann with a larger chunk of the firm he helped found a decade ago, those shares are likely worth less than SoftBank had offered for them. WeWork set a strike price of $4.12 for employee stock options in November, far lower than the $19.19 SoftBank was set to pay as part of the rescue.

Asher Gold, a spokesman for Mr Neumann, declined to comment.

The pandemic has brought major economies to a standstill, devastating co-working companies. WeWork's locations stand practically empty.

Its bonds trade at less than 40 cents on the dollar and are yielding 36pc.

Mr Neumann, 40, already had billions erased from his fortune last year, at least on paper, as WeWork's private market valuation collapsed.

His net worth rose to $14bn last year before dropping to $1.3bn at the time of SoftBank's bailout, according to Bloomberg's wealth ranking.

A special committee of WeWork's board said in an emailed statement that it "will evaluate all of its legal options, including litigation", against the Japanese conglomerate.

Bloomberg

Irish Independent