WeWork Home To CE Companies Facing Tough Future
WeWork whose serviced offices are used by several European and US consumer electronics and appliance brands in Australia is in trouble with investors doubting their future and SoftBank who has a major shareholding in the Company now moving to dump CEO Adam Neumann’s who they doubt has the ability to lead WeWork.
This year Samsung held a major event at WeWork Sydney offices while European Company HMD Global who sell Nokia smartphones also works out of the Companies Sydney serviced offices.
Softbank is expected to call for a board meeting to demote Neumann this week, after the lossmaking property group shelved its initial public offering and the chief executive’s volatile behaviour and drug use came to light.
The Financial Times claims that Neumann’s outsized influence over the company has become one of the biggest hurdles in the path of a multibillion-dollar IPO, according to investors and people briefed on the matter.
WeWork offices are used by small brands who don’t want to invest in their own office space in Australia, these Companies often take temporary office space using a local distributor to supply retailers.
The board could decide against changing the CEO role in the end, these people cautioned, and either rally around Mr Neumann or hire a new executive chairman to oversee the company’s management.
analysts claim that any attempt to oust Mr Neumann could backfire. Mr Neumann’s shares carry 10 times the voting rights of other investors and he has the ability to replace a number of the members on the board.
Three of the seven board members were appointed by WeWork investors, including the SoftBank Vision Fund, Benchmark Capital and Hony Capital.
When the company first published documentation for its planned initial public offering, it said Mr Neumann’s shares would carry 20 times the votes of ordinary shares, his wife would have a say in picking his successor should he die, and WeWork’s board would include no women.
Investor hostility forced the company to reverse each of those plans, cutting Mr Neumann’s voting rights to 10 times, removing his wife from succession decisions and adding Frances Frei, a former Uber director, to the board.
The Wall Street Journal reported earlier on Sunday that some WeWork board members were pushing Mr Neumann to step down.