With WeWork readying its IPO roadshow, CEO Adam Neumann seems to be looking to ease concerns about his startup’s leadership. Specifically, the co-founder is returning the $5.9 million his own company paid him for the “We” trademark earlier this year in what critics argued was the “most egregious” example of the co-working company’s corporate mismanagement. “At Adam’s direction, the issuance to We Holdings LLC of the partnership interests was unwound and the partnership interests were returned to the We Company partnership,” the company wrote in an amended S-1 filing Tuesday. “The We Company continues to hold all of the assigned rights to the ‘we’ family trademarks.”
In January Neumann raked in a $5.9 million stake from WeWork as part of a complicated restructuring of the company, in which the We Company acquired the trademarked “We” from the investment company run by Neumann and Miguel McKelvey. The unusual move was blasted by critics, who said it was emblematic of “unforced errors” that could lead to a massive IPO flop. “It’s abusive of the company’s balance sheet,” wrote Axios’ Dan Primack.
The new S-1 filing, which reveals the addition of former Uber executive Frances Frei to the WeWork team, seems designed to allay concerns about the company’s corporate governance as it prepares to meet with potential IPO investors, possibly as early as next week, as Bloomberg reported Tuesday. But it’s unclear whether simply returning the money will be enough to rid WeWork’s public offering of the specter of mismanagement.
WeWork’s IPO has long been viewed with suspicion, with skeptics arguing that the unprofitable start-up is really a real estate company in a tech company’s clothing. Neumann has only added to the concerns, dismissing the notion that his company has been overvalued even as he cashes out more than $700 million of his WeWork shares, a move some see as betraying a lack of faith. (Neumann declined the Wall Street Journal’s request for comment on the decision.) Neumann is hoping he can get investors to commit to WeWork’s massive public offering. But to do so, he may have to shake the perception that he’s creating what Trition Research Inc. C.E.O. Rett Wallace has described as a “masterpiece of obfuscation.”
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