- Former Twitter CEO Dick Costolo called out WeWork CEO Adam Neumann in a profile of Neumann published Wednesday in the Wall Street Journal.
- “The degree of self-dealing,” Costolo said Neumann, “is so egregious, and it comes at a time when you’ve got regulators and politicians and folks across the country looking out at Silicon Valley and wondering if there’s the appropriate level of self-awareness.”
- The S-1 document filed by WeWork ahead of its IPO details at least two major cases of the type of self-dealing described by Costolo: Several properties owned by Neumann are leased by WeWork, and Neumann sold the rights to the word “We” to the company for around $US6 million.
- Following negative public response, Neumann and WeWork walked back the naming rights arrangement, and Neumann returned the money. Neumann has also committed to giving his profits from these particular real-estate deals back to the company.
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The office co-working company once valued at $US47 billion, WeWork, filed an S-1 for its initial public offering in mid-August.
One month later and WeWork’s parent company is said to have been mulling going public with a valuation in the $US10 to $US12 billion range. It’s placed its IPO on pause – it was originally supposed to go public this month, but is now said to be aiming for the end of the year.
The story of what happened is complex and still ongoing, but one particular thread stands out from the last month of WeWork news: CEO Adam Neumann’s repeated self-dealing while leading the company.
In the company’s S-1, it was revealed that Neumann owns several properties that WeWork leases from him, and that he sold the rights to the word “We” to WeWork (while serving as CEO) for nearly $US6 million. He has since given back the money for the naming rights, and committed to giving his profits from the related real-estate deals back to the company.
WeWork and Neumann have received plenty of criticism in the last month as the company readies to go public, including from New York University’s Stern School of Business professor Scott Galloway, the best-selling author and tech-industry pundit, who deemed the company, “WeWTF” after it filed its S-1.
But few have been as scathing as former Twitter CEO Dick Costolo was in a Wall Street Journal profile of Neuman published on Wednesday.
“This is not the way everybody behaves,” Costolo told the WSJ. “The degree of self-dealing in the S-1 is so egregious, and it comes at a time when you’ve got regulators and politicians and folks across the country looking out at Silicon Valley and wondering if there’s the appropriate level of self-awareness.”
WeWork representatives declined to comment on Costolo’s statements, and cited a quiet period as the company prepares to go public.
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