Home sci-tech WeWork reduces president powers before going public


WeWork reduces president powers before going public

by ace
WeWork reduces president powers before going public

We Company, owner of the WeWork shared office network, said in an amendment to its IPO prospectus on Friday that it restricted the voting power of founder and CEO Adam Neumann.

The move is part of changes in corporate governance to encourage investor demand in the company's initial public offering (IPO) expected later this month.

According to Reuters, the shared office company said it was making the changes "in response to market comments." At first, concerns arose about Neumann's influence, possible conflicts of interest, and the value the company was looking for.

Among the major changes, Neumann will give the company all the profit he receives from renting his own property that he has entered into with We Company. He has already returned $ 5.9 million from the company for We trademark rights. These were some of the points that made possible investors worried about possible conflicts of interest between the president and the company.

The company considers seeking an IPO valuation of less than half of what it expected just nine months ago, given weak investor demand. We now aim for a valuation of $ 15 billion, up from $ 47 billion in January.

The changes in We Companhy's structure came after discussions between Neumann, the company's board members and others about saving the stock offering, The New York Times said.

According to the newspaper, We also suffered pressure from Softbank to postpone the IPO. The Japanese investor conglomerate has already contributed $ 10.5 billion to the company, and its latest investment has helped it reach the $ 47 billion mark in market value.

Neumann's special voting shares will now decrease from 20 to 10 votes per share, yet it will still retain the highest voting power in the company's decisions.

It will also limit its ability to sell shares in the second and third years after the IPO to no more than 10% of its shares.

In addition, no Neumann family member will be on the company's board and any successor will be selected by the board of directors in a waiver of plan for his wife and co-founder, Rebekah Neumann, who is brand vice president, to help. to choose the successor.

It remains to be seen whether the changes will be sufficient to alleviate broader investor concerns about the sustainability of the We Company business model, which is based on a mix of long-term liabilities and short-term revenue. Investors have doubts how successful this model would be during an economic crisis.

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