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Some WeWork Board Members Seek to Remove Adam Neumann as CEO

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Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#31

Post by kevinmchugh »

tyri_kai_psomi wrote: post #24
ink_13 wrote: post #20

Earlier quoted context omitted.

This is true of many large companies today, though. Facebook comes to mind.

What I don't understand is what is so mind boggling to GP? This is the norm for the vast majority of private companies.

That vast majority never goes public or gets close to doing so, right? Those companies aren't worth a billion or more

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#32

Post by greenyoda »

exogeny wrote: post #19

Considering he has the votes to fire the entire board, I'd be shocked if this happens. Softbank is completely fucked.

If he fires the whole board, wouldn't that add further doubt about the company's governance and reduce the expected value of any future IPO even further? It doesn't seem like that would be in his best interest.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#33

Post by willwagner »

tyri_kai_psomi wrote: post #24
ink_13 wrote: post #20

Earlier quoted context omitted.

This is true of many large companies today, though. Facebook comes to mind.

What I don't understand is what is so mind boggling to GP? This is the norm for the vast majority of private companies.

I think if you are including coffee shops, dry cleaners, and the rest of small businesses that are self-funded, I agree. If you look at VC backed high tech startups, I don't think that is the norm:

https://www.capshare.com/blog/4-key-insights-from-5000-cap-t...

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#35

Post by Donald »

jeremyjh wrote: post #17

> Mr. Neumann still has allies among the directors and the ability to fire the entire board thanks to shares he controls that carry extra votes. It defies imagination that a fund would put 10B into a company whose CEO is accountable to no one. I think we may also see new leadership in SoftBank, or at least their next fund.

You can thank loose monetary policy that has created an unbalance between capital seeking returns and the number of investment opportunities. Executives have leveraged this into abusive multi-class share structures that sacrifice shareholder's ability to reign in company behavior. The result is a few tech executives wielding unaccountable authority over incredibly powerful economic resources.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#36

Post by raverbashing »

tempsy wrote: post #26

Didn't investors, especially SoftBank, enable this behavior? They deserve as much blame for this mess as he does, if not more.

Probably.

It would be funny if this blew up in SoftBank's face. I think it will make even Theranos sound more sensible.

Sure, the product exists and it's good but the "business plan" and its assumptions and business structure don't make much sense.

Though I don't know how long they will survive without any more cash injections in the short term due to all their rental liabilities.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#37

Post by rossdavidh »

exogeny wrote: post #19

Considering he has the votes to fire the entire board, I'd be shocked if this happens. Softbank is completely fucked.

It depends, I suppose, on how soon We needs more investor money. If he actually exercises his right to fire the entire board, it seems like it would be hard to get somebody else to chip in big money.

On the other hand, it could be that Softbank knows it won't work, but feels they have to be seen attempting something.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#38

Post by kelnos »

tyri_kai_psomi wrote: post #24
ink_13 wrote: post #20

Earlier quoted context omitted.

This is true of many large companies today, though. Facebook comes to mind.

What I don't understand is what is so mind boggling to GP? This is the norm for the vast majority of private companies.

Assuming you mean just tech companies, yes, this is now the norm. But I suspect it's mainly due to backlash over the previous period, where many ignorant investors would oust founders and replace them with "professional managers" who would then either run the company into the ground, or sell it for scraps.

So I completely understand why founders, now given the opportunity, would write these sorts of share class structures into their business. It's definitely gone too far, though. But that's usually what happens.

Re: Some WeWork Board Members Seek to Remove Adam Neumann as CEO

#39

Post by the_watcher »

ink_13 wrote: post #20
jeremyjh wrote: post #17

> Mr. Neumann still has allies among the directors and the ability to fire the entire board thanks to shares he controls that carry extra votes. It defies imagination that a fund would put 10B into a company whose CEO is accountable to no one. I think we may also see new leadership in SoftBank, or at least their next fund.

This is true of many large companies today, though. Facebook comes to mind.

It's true of some large companies, yes. But it's still extraordinarily uncommon overall. Zuck's Facebook arrangement was essentially unique at the time of the IPO, and Facebook's success led to more founders on unicorn trajectory demanding and receiving similar terms, but it's still far from the norm.
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