We Co., the parent of office space sharing company WeWork, is withdrawing its initial public offering, the company said in a press release on Monday.
The company pulling its IPO, or the first offering of shares on a publicly traded stock exchange, concludes a turbulent month of management shake-ups and valuation cuts for the company co-founded by University of Oregon alumnus Miguel McKelvey.
“We have decided to postpone our IPO to focus on our core business, the fundamentals of which remain strong,” the company’s co-CEOs Artie Minson and Sebastian Gunningham said in the press release. “We are as committed as ever to serving our members, enterprise customers, landlord partners, employees and shareholders. We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future.”
Adam Neumann, the company’s chief executive, was ousted as CEO last week following changes to the company’s corporate governance and a profile from The Wall Street Journal that documented his eccentric behavior and management style. Neumann will remain as the chairman of the board, according to CBS, but was replaced by Minson and Gunningham as co-chief executives.
Other executives who were close to Neumann are also leaving the company, according to Bloomberg, but McKelvey remains on board. We Co. did not respond to an inquiry from the Emerald that asked for a comment from McKelvey about the company’s future.
The company also saw significant valuation cuts over the last month — initially being valued at over $47 billion, but could eventually drop to below $15 billion, according to CNBC.
We Co. said in filings with the Securities and Exchange Commission that the company posted a loss of $1.61 billion in 2018 and is running an accumulated deficit of almost $4 billion as of the end of June. The company also said it has lease obligations of $47.2 billion as of the end of June.
Who is Miguel McKelvey?
McKelvey, the company’s co-founder and chief cultural officer, grew up in Eugene and played basketball at UO while studying architecture.
McKelvey, who graduated in 1999, gave the commencement speech at UO’s graduation last year. His mother started what became the community newspaper Eugene Weekly and said his mother was an anti-war activist.
“I grew up in this environment where everything was different and expectations were really alternative. There was nothing that I was supposed to do in my life,” he said.
During the commencement speech, he recounted stories about his time at UO and recalled a time when a classmate told him that he was “actually really nice” despite other people thinking otherwise.
“So from that moment, I had this realization It’s not enough to just pursue your own passion. It’s not enough to be driven to succeed. But you have to realize how you show up in the world,” McKelvey said.
McKelvey also told graduates about his move to New York City at age 29, something he said he dreamed about as a kid, and how his mindset changed when he moved there. He said that he thought that he made it, but said he “felt empty” despite reaching New York.
“I decided that instead of looking for a destination, instead of trying to figure out what is the formula of success, what is this next place I’m going to go, I just decided I would be open to anything — literally anything that comes my way I’m going to embrace it with excitement and energy and especially if it’s uncomfortable,” McKelvey said.
McKelvey said that the openness is what led him to meet Neumann in an elevator.
“As you go through life there are going to come moments that make you feel scared, that make you feel challenged, that perhaps can be overwhelming — those are the ones to embrace,” McKelvey said.