Back in 2019, the office-sharing company, WeWork, seemed like the next big Silicon Valley success story. WeWork was opening shared office space around the world and was valued at a staggering $47 billion. Since then, the company has suffered one of the most spectacular corporate collapses in recent US history. Following its 2021 IPO, WeWork witnessed a shocking 98% decline in value, ultimately leading it to file for Chapter 11 bankruptcy protection in November of 2023. So, what led to this downfall? And what are the anticipated outcomes of WeWork's bankruptcy? Joining us today to unpack this topic is our very own, Richard Squire, Professor of Business Law at Fordham Law School. Tuning in you’ll learn about the founding of WeWork, its unconventional CEO, the events that led to its bankruptcy, and how this process is expected to play out. We explore why the company was so appealing to investors and employees, the devastating impact of the COVID-19 pandemic, and how bankruptcy is allowing WeWork to salvage what’s working and continue in a new form. To hear all of the details of this fascinating case study be sure to tune in to this informative conversation!
Key Points From This Episode:
• An overview of WeWork and its business model.
• Some background on WeWork Founder, Adam Neumann.
• How Neumann’s upbringing on a Kibbutz in Israel inspired his vision for WeWork.
• The ethos of sharing at WeWork and how this attracted employees and investors.
• What WeWork’s trajectory can teach us about American history.
• Neumann’s unusual management style and the problems this caused.
• Why Neumann stepped down as CEO in 2019 when the company was about to launch its IPO.
• The devastating impact of the COVID pandemic on WeWork and shared office spaces.
• Why WeWork’s initial IPO failed, why Neumann left, and how the company rebranded.
• An overview of the events that led to WeWork’s bankruptcy.
• Breaking down the bankruptcy process and how it played out with WeWork.
• Predictions on how WeWork will emerge from this bankruptcy.
• How WeWork is renegotiating its leases in different cities.
• Mechanisms in the bankruptcy process that help companies continue at a new scale.
• Evaluating how different investors might approach these types of companies in the future.
Links Mentioned in Today’s Episode:
Richard Squire
WeWork
The History of English Podcast
Kevin Stroud on Patreon
Special Episode: Richard Squire on the Collapse of Silicon Valley Bank
St. Elmo's Fire
Fordham University School of Law Corporate Law Center
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