Billion Dollar Loser by Reeves Wiedeman

Author:Reeves Wiedeman
Language: eng
Format: epub
Tags: None
Publisher: Little, Brown and Company
Published: 2020-10-20T00:00:00+00:00

MASA’S INVESTMENT IN Adam and his company was officially announced on August 24, 2017. It totaled $4.4 billion, some of which came from SoftBank itself, and $1.4 billion of which was earmarked for WeWork’s continued expansion into Asia—a deal structure that kept it below Saudi Arabia’s veto threshold. WeWork’s valuation leapt from $17 to $20 billion, making it the fourth most valuable start-up in America, after Uber, Airbnb, and SpaceX. The deal also included $1.3 billion earmarked for buying stock from existing WeWork shareholders. Benchmark cashed out $129 million, realizing an eight-fold return on its 2012 investment. Sam-Ben Avraham and Marc Schimmel, Adam’s friends and early investors, cashed out tens of millions, while Joel Schreiber, the man who had given WeWork its first injection of capital, passed his stake on to SoftBank for a poignant amount: $44.6 million, just shy of the $45 million valuation Adam and Miguel pulled out of thin air back in 2009.

The biggest winner was Adam. We Holdings sold $361 million worth of its WeWork stock—the maximum amount, and nearly three times more than every other WeWork employee was able to cash out combined. This was an even more shocking amount than the earlier stock sales. Why cash out so much now if you believe the potential spoils to be even greater down the line?

One answer was that the Neumanns needed to fund their increasingly lavish lifestyle. At the end of 2017, Adam and Rebekah spent $35 million to buy four apartments in a single Gramercy building, combining three of the units into a mega penthouse. Adam bought homes for his sister and grandmother, paying them back for the rent and tuition they had covered during his early years in New York. WeWork employees could only roll their eyes when Adam and Rebekah spoke about their embrace of the sharing economy and lack of interest in material wealth. “We believe in this new ‘asset-light lifestyle,’” Rebekah told one interviewer, at a time when the Neumanns owned five homes. “We want to live off of the land. I’m like a real hippie.” WeWork’s 2017 Halloween party had another apt theme: The Great Gatsby.

With Masa’s money in hand, a calm seemed to settle over Adam. He was set for life, no matter what happened. Executives at WeWork said the chaos that so often permeated the company settled down. A day before the start of Hanukkah, in December of 2017, Adam invited Cheni Yerushalmi to visit him at WeWork’s Chelsea headquarters. The two men hadn’t seen each other much in the years since Yerushalmi called Adam a “fucking piece of shit” for seemingly mimicking his business and running with it after his mother had connected them. Like many office-space operators, Yerushalmi didn’t have Adam’s gift for fundraising, and Sunshine Suites had gone out of business. As Yerushalmi’s mother pointed out, it wasn’t the idea that mattered, but what you did with it.

Yerushalmi settled into Adam’s large office, with its Peloton bike and punching bag. Adam said he had been

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