Though he was chairman, Mr. Neumann missed numerous board meetings throughout 2018, sending deputies instead. In at least one meeting, directors discussed the pace of growth.
Several directors told others they took comfort knowing WeWork would soon need to go public because of its need for more cash to keep growing. The public markets, they told each other, would help serve as a check on Mr. Neumann.
In board meetings, directors including Messrs. Schwartz, Dunlevie and Langman pushed Mr. Neumann to commit to a timetable for an IPO.
Messrs. Neumann and Son had other plans. In mid-2018, they started talking about a giant deal in which SoftBank would buy a majority stake in WeWork for roughly $20 billion, including buying out existing investors.
It wasn't to be. SoftBank's stock plunged amid a broader fall in technology stocks and concerns over the potential acquisition, while key SoftBank investors, including Saudi Arabia's Public Investment Fund, opposed it. On Christmas Eve, Mr. Son told Mr. Neumann the deal wouldn't work.
Mr. Neumann took WeWork's jet to Hawaii and met Mr. Son in an attempt to come up with an alternative. Over breakfast, Mr. Son agreed to invest $2 billion, bringing the size of WeWork's latest round of financing to $6 billion, and SoftBank's total to $10 billion. The two men agreed the company's valuation would be $47 billion, although people close to the deal never saw a clear explanation of how that number was determined, according to people familiar with the matter. The deal called for $1 billion to go to buying shares from existing investors, allowing some on the board to sell.
Mr. Neumann said in a January interview on CNBC that the funding from SoftBank was "above and beyond what we need to fund the company for the next four to five years."
The company would nearly run out of cash in November. WeWork ended up on a path to burn more than $3 billion for 2019.
Mr. Neumann told the Journal earlier this year that watching Mr. Son do his math was "beautiful to see."
In need of more funding, WeWork began to turn to an IPO, even though Mr. Neumann felt more comfortable in the private markets.
Bankers up and down Wall Street had been wooing him for years with the hope of an eventual IPO, where they would win millions of dollars in fees and the prestige of bringing a giant company to the public markets.
Closest to the company had always been JPMorgan and Goldman Sachs, both WeWork investors. Mr. Neumann referred to JPMorgan's Mr. Dimon as his personal banker.
It was almost literal: JPMorgan led a $500 million credit line to Mr. Neumann and lent another $97 million in other forms of debt, largely mortgages with low rates on his many homes. Mr. Dimon once ordered his bank to mimic some of WeWork's office designs after a tour of a WeWork with Mr. Neumann.
In theory, investment bankers can provide prospective IPO companies practical expertise on the rigors of life as a public company owned by pension funds and individual investors.
In practice, the bankers supercharged WeWork's visions of grandeur. They pitched an extraordinarily optimistic picture, giving Mr. Neumann and other executives more confidence in WeWork's growth-heavy, loss-heavy strategy. JPMorgan told WeWork it thought the company would be worth as much as $60 billion, which was lower than estimates from other banks. Mr. Neumann said that wasn't aggressive enough, a person familiar with the matter said.
Bankers at Goldman Sachs referenced Mother Teresa and Bob Marley in its pitch presentation. One slide enumerated, "Your path to $1 trillion," referring to a target of $1 trillion market capitalization within a decade or so.
Comparable companies, Goldman said, were Salesforce.com Inc., Amazon, Alibaba, Facebook Inc. and Alphabet Inc. The difference between WeWork and this cohort of companies, Goldman Sachs' pitch deck said, was: "You are scaling faster."
One slide said only, "Growth is paramount."
Mr. Neumann and other executives began using the projections to justify WeWork's $47 billion valuation to some employees and outsiders.
There were warning signs that public-market investors would be wary. WeWork executives and its bankers were aware that T. Rowe Price, a significant IPO investor, wouldn't be investing in the offering. The fund's co-head of global equity, Mr. Veiel, said they knew for years they wouldn't invest, saying there was "mutual disinterest."
As IPO preparations heated up, Mr. Neumann became distracted by surfing, a passion of his that became increasingly blended into the fabric of the company.
After spending part of the winter living in his house in Marin Country, Calif., in early 2019, he moved back to New York, and relocated his Hawaii-based surf instructor and his family there, too. Mr. Neumann paid for their apartment in Manhattan, and some of the instructor's children attended WeGrow, people familiar with the arrangement said.
Throughout the year, Mr. Neumann made surf trips to the Dominican Republic and the Maldives. During a week in early June, WeWork's company plane made two trips between Costa Rica and New York.
Meanwhile, Mr. Neumann kept up surfing from the Hamptons and Montauk over the summer. Executives from WeWork and bankers and advisers including lawyers from Skadden, Arps, Slate, Meagher & Flom LLP worked with Mr. Neumann and his wife on IPO-related documents and presentations at their homes there.
Mr. Neumann oversaw a complex legal restructuring of the company that gave him and a cadre of other executives stock compensation with more favorable tax treatment than other employees at the company -- a move approved by the board.
The mood changed drastically in mid-August.
After WeWork made its IPO paperwork public, potential investors, analysts and the media panned WeWork for its growing losses and lack of a path to profitability, and for Mr. Neumann's string of conflicts. The language used to describe the company was widely derided. The prospectus was dedicated to the "energy of we," and the company's mission statement was to "elevate the world's consciousness."
The reaction sent WeWork's expected valuation plummeting and prompted Mr. Neumann's financial enablers to speak up more forcefully.
Mr. Neumann's investment bankers from JPMorgan Chase and Goldman Sachs had been bracing for a rough response. While they were bullish in pitches months earlier, weeks before the IPO filing was made public, they warned Mr. Neumann that his unusual ties to the company and other governance decisions could cut the company's stock price.
By the end of August, weeks before the IPO was planned to launch, WeWork's valuation was expected to be less than half the $47 billion mark from January.
At Mr. Son's behest, Mr. Neumann took the company jet to Tokyo, where Mr. Son argued to delay the offering, saying WeWork clearly wasn't ready. Mr. Neumann rebuffed Mr. Son, saying he would push ahead.
As Mr. Neumann prepared to leave, Mr. Son offered some parting advice, according to people familiar with the conversation: This is going to be bad for you and bad for the company.
In the days that followed, Mr. Neumann scoured the globe for others to commit to the IPO.
On Sept. 3 in London, he met Yasir al-Rumayyan, the head of Saudi Arabia's sovereign-wealth fund, a big investor in SoftBank's Vision Fund, according to people familiar with the meeting. Mr. al-Rumayyan didn't invest.
Facing criticism that WeWork had no female directors, Mr. Neumann announced he would add Frances Frei, a professor of technology and operations at Harvard Business School, to its board.
Ms. Frei had been employed as a consultant to help improve management, including encouraging gender equality in hiring and setting up internal training programs, and her firm was given a three-year contract valued at roughly $5 million, including stock options. Some executives were frustrated by her use of private aircrafts to travel from Boston to WeWork's headquarters in Manhattan at WeWork's expense.
The board, though, was annoyed Mr. Neumann hadn't told them about the addition until after it was done. Directors vented to each other at a board meeting that followed -- one in which Mr. Neumann was again absent. Soon after, Mr. Langman confronted Mr. Neumann, telling him his disengagement with the board was unacceptable.
Mr. Neumann showed up at the next meeting days later, apologized and pledged to attend.
In another meeting in WeWork's headquarters, bankers from JPMorgan and Goldman, his main lawyer from Skadden Arps and several senior executives discussed more changes. Mr. Neumann initially said he didn't want to do anything further. Two of JPMorgan's bankers on the deal, Michael Millman and Noah Wintroub, told Mr. Neumann that the company had no chance of going public without changes.
Mr. Neumann eventually relented. The group spent hours, stretching long into the evening, getting Mr. Neumann to agree to everything.
The changes included a promise to appoint a lead independent director by the end of the year, halving his voting rights to 10 votes per share from 20, and eliminating a provision in which his wife, Rebekah Neumann -- also a WeWork co-founder -- would play a role in choosing Mr. Neumann's successor.
That night, Mr. Neumann's co-founder, Mr. McKelvey, called Nasdaq executives to tell them WeWork planned to list on their exchange when they debuted roughly two weeks later.
As bankers surveyed investors, it was clear the offering still might not have enough demand for the more than $3 billion WeWork wanted to raise -- which was also necessary to gain access to another $6 billion in debt.
WeWork executives and some advisers worried about another development: a coming Journal story that they feared would detail Mr. Neumann's erratic management style and behavior including marijuana use.
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