- REUTERS/Eduardo Munoz
- According to a Wall Street Journal report, WeWork cofounder and CEO Adam Neumann has sold sizeable portions of his stake in the office space sharing company.
- Neumann also borrowed against his holdings, according to the WSJ report, buying more shares in his company as well as purchasing five homes and investing in real estate and startups.
- Neumann’s sales and debt transactions totalled $700 million in total, according to the WSJ. The news comes as WeWork and its parent company, last valued at $47 billion in private markets, is preparing for a highly-anticipated IPO.
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The cofounder and CEO of WeWork, the fast-growing co-working startup, has sold and borrowed hundreds of millions of dollars in transactions involving his shares in the company, according to a report in the Wall Street Journal on Thursday.
According to the report, Adam Neumann, WeWork’s largest single shareholder, has cashed out some of his stake in the company in recent years, while also borrowing money against his holdings. The news of Neumann’s transactions, which the WSJ said totalled $700 million, comes as the office-space giant prepares for a highly anticipated IPO.
WeWork confidentially filed to go public in April and was valued at $47 billion in its most recent private funding round in January.
Neumann sold some of his stake through stock sales during several rounds of financing, according to the WSJ report, which said it was unable to confirm his current stake. The WSJ said that Neumann used some of the proceeds to exercise his stock options and purchase more shares in WeWork. Neumann, 40, has also used the money to buy five private residents as well as to invest in commercial real estate and startups, the report said.
It is not uncommon for founders and other early stakeholders of private companies to cash out some of their holdings during financing rounds to entice largest investors. But selling sizeable stakes ahead of a planned public offering sends Wall Street mixed signals about the founder’s confidence in the company’s long-term viability on public markets. According to anonymous sources quoted in the WSJ report, Neumann’s borrowing against his stake proves he is confident in the coworking giant’s long-term success.
The company has raised $10 billion in venture funding and debt funding since Neumann cofounded the company in 2011. The company’s financials have come under scrutiny in the run-up to its public debut as it struggles to turn large real estate investments into a profitable business model.
WeWork declined to comment.