Shortly before Christmas, Adam Neumann, CEO of WeWork, was about to sign a deal that would have changed everything for him and his company. His largest financial backer, SoftBank’s Masayoshi Son, was prepared to give him enough money to fuel not only WeWork’s ongoing and massive growth plans but also to buy out all his other existing investors. The numbers on the table ranged as high as $20 billion, at a valuation that hovered close to $50 billion. With one signature, Neumann would have unprecedented freedom as an entrepreneur to build out his most ambitious plans for his company.
Then Son called with bad news.
Just as both sides were preparing to close the deal, December’s market turmoil clobbered SoftBank’s stock–down 20% since late November. The highly anticipated IPO of its Japanese telecom unit was pummeled 14% on its first day of trading. (SoftBank is a conglomerate that includes a variety of tech holdings and the VisionFund, a $100 billion investment arm.)
Son “called me,” Neumann recalls, in an interview on Monday with Fast Company. “He said, ‘We’re partners. What should we do?'” Son told him that the deal SoftBank and WeWork had spent months negotiating was no longer viable.
It was a blow, but those inside WeWork who worked closely with Neumann on the deal say that, almost immediately, he returned to the negotiating table. “It took a day for Adam to recover,” says one source who was close to the negotiations.Read Complete Article