Well, well, well. It turns out that flushing millions of dollars down the toilet year over year is not a particularly sustainable path to success!
Citing two sources familiar with the matter, the Financial Times reported Thursday that onetime unicorn and current imploding disaster WeWork could run out of cash as soon as the end of next month and is currently in the process of rushing to scrape together a debt financing package. According to the report, JPMorgan Chase — which was involved with the company’s bombed initial public offering — is both considering throwing in for the package as well as attempting to persuade other financial institutions to back the emergency financing.
Bloomberg, meanwhile, reported Friday that the debt package — which both sites report could come as soon as next week — is somewhere in the ballpark of $US5 billion ($7 billion) to bail out the company. Bloomberg, too, cited sources as saying that the company must secure the financing to avoid running out of money by the end of November. Both WeWork and JPMorgan Chase declined to comment on the debt package reports.
A new profile of the freewheeling CEO of WeWork reads like a loosely adapted episode of Silicon Valley.
As both Bloomberg and the Financial Times noted, WeWork owner We Company had banked on securing a $US6 billion ($9 billion) loan that was dependent on a succession IPO, but that plan clearly backfired spectacularly. The company filed to withdraw its public offering late last month following a shitstorm of chaos involving the company’s ousted co-founder and CEO Adam Neumann and WeWork’s financial standing.
Neumann stepped down from the role of CEO last month just a week after the publication of an absolutely bananas Wall Street Journal profile that detailed his allegedly excessive and wasteful mismanagement of company funds and resources to further his goal, according to one source who spoke with the paper, of being “president of the world.” Artie Minson and Sebastian Gunningham were appointed as co-CEOs to manage the company after Neumann’s exit.
In addition to the debt package reportedly in the works, WeWork is apparently also hoping to trim some of the fat. As first HuffPost reported Friday, the company is shuttering its Manhattan public school, WeGrow, after the current school year.
“As part of the company’s efforts to focus on its core business, WeWork has informed the families of WeGrow students that we will not operate WeGrow after this school year,” a WeWork spokesperson told Gizmodo in a statement by email. “WeWork and the families of WeGrow students are engaging in discussions with interested parties regarding plans for WeGrow for the following school year.”
Rebekah Neumann, Adam Neumann’s wife and head of the WeGrow initiative, told Fast Company in 2017 that she conjured the idea for the Montessori-style operation after failing to find a school for their daughter that would “nurture growth, her spirit as well as her mind.”
“These children come into the world, they are very evolved, they are very special,” Neumann told Fast Company at the time. “They’re spiritual. They’re all natural entrepreneurs, natural humanitarians, and then it seems like we squash it all out of them in the education system. Then we ask them to be disruptive and find it again after college.”
Won’t someone please think of these brilliant, disruptive children.