Remember WeWork? Well Adam is Back!

Adam Neumann has been trying to buy WeWork - the company he cofounded out of bankruptcy — allegedly with the help of the hedge fund manager Dan Loeb of Third Point. 

Neumann’s new real estate company "Flow" has sent a letter to WeWork requesting that they consider its takeover approach. Flow has already raised $350 million from the venture capital firm Andreessen Horowitz, disclosed in the letter that Loeb’s Third Point would help finance a transaction. 

The Financial Times contacted Third Point to verify their involvement in the deal and were told that the fund had only held “preliminary conversations with Flow and Adam Neumann about his ideas for WeWork.” They went on to say that they have made “no commitment to participate in any transaction.”

How WeWork Went From $47B Startup to Bankrupt Penny Stock

WeWork, once a-venture-capital darling, has filed for Chapter 11 bankruptcy. Co-founded in 2010 by Adam Neumann, the filing marks a reversal for the company that specialized in leasing shared workspaces and was once valued at $47 billion. WSJ breaks down how the desk-rental company went from one of the world’s most valuable startups to a bankrupt penny stock.

The Inevitable Decline of WeWork

WeWork announced this week that it would not make two sets of interest payments totaling about $95 million, a move meant to jump-start negotiations with its lenders at the same time it tries to cut costs with its landlords. 

The missed interest payments will spur speculation of a bankruptcy filing. But WeWork says it has the cash on hand, and the company has a 30-day grace period to make the payments, which were due Monday. 

At the end of June, it had $205 million in cash and access to a credit line worth $475 million. Skipping an interest payment is not necessary to negotiate with lenders. But indebted companies sometimes use the move to put pressure on lenders to restrike deals under more favorable terms. 

From its inception in 2010 to its collapse in 2023, WeWork's journey has been a roller-coaster. Once valued at $47 billion dollars, the company today, is on the verge of bankruptcy. How did the Venture Capital backed co-working company, end up as the biggest financial bonfire in Venture Capital history?