Despite Adam Neumann’s Departure As CEO, We Is Still A Horrible Investment

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WeWork needs a scalable business model and a new CEO probably can't deliver one

... [+]I am sorry I was not in the board room at We to hear how WeWork CEO, Adam Neumann, was convinced to step aside and become non-executive chairman. After all, Neumann controlled the board and could have used his power to replace the board with friendlier folks.

The Times reports that on September 22, JPMorgan CEO Jamie Dimon and Benchmark Capital partner, Bruce Dunlevie spoke with Neumann. Then on September 24, the board decided to oust Neumann. Sadly for me, this story lacks the details needed to understand why Neumann accepted this fate. In case you’re thinking that all startups skip the scalable business model stage, think about Zoom Video Communications. For the six months ending July 2019, Zoom’s revenues nearly doubled to $268 million while it made a profit of $5 million and threw off $53 million in cash from operations, according to its latest quarterly statement. Since Zoom’s IPO the shares were up 31% to about $81 last week.

 

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