- If investors buy into WeWork’s ambitious vision when it sells shares to the public in its IPO, a handful of people and investors stand to make a killing.
- The IPO paperwork reveals who the company’s biggest backers are.
- We won’t know how much their stakes will be worth until the company reveals more details about its IPO, such the initial share price.
- But we still had some fun calculating what these stakes might be worth, based on what shares reportedly previously sold for.
- Read all of Business Insider’s WeWork coverage here.
WeWork just dropped the paperwork for its IPO.
That means, we now have a chance to take a closer look at the company’s finances, including which investors own the largest stakes.
The We Company, as WeWork’s corporate parent is known, has many more private investors than its new S-1 filing reveals and some of them have already cashed out and done well. Insiders have sold billions of dollars of We Co. stock in so-called secondary transactions — in which shareholders privately sell their stock directly to investors — according to Pitchbook, the database that tracks such records.
For instance, shareholders sold $1.3 billion to Softbank in August, 2017, in addition to the $1.7 billion Softbank spent on shares issued by the company. In January, Softbank bought another $1 billion of shares from existing shareholders, as well, Pitchbook says.
The company hasn’t yet disclosed the price it plans to sell shares. So it’s not possible to know (or even guess) how much each person’s stake is worth at this time.
Still, in 2017, when WeWork raised $1.7 billion (and had raised $3.4 billion to date) which valued the company at $21 billion, investors bought in at $57.90 per share, according to Pitchbook.
So, just for the sheer fun of it, we calculated the value of all classes of shares at $58.
We’ll learn the true value of each stake when the company prices its shares right before they begin to trade, and we’ll update this article at that time.
WeWork has already made Adam Neumann a very rich man, though the S-1 paperwork doesn’t make it easy to figure out how much of his stake he’s sold, what he personally still owns and what he’s borrowed against.
Neumann has reportedly cashed out $700 million from a combination of selling shares to investors, selling shares back to the company, and taking out loans backed by his shares.
A separate company he controls called WE Holdings LLC is the largest shareholder in the We Company.
To clarify: The We Company is the company that is going public. We Holdings LLC is a separate company, controlled by Neumann and WeWork’s other cofounder, Miguel McKelvey, that holds a good chunk of Neumann’s shares (and, presumably most or all of co-founder McKelvey’s shares, too).
While both of them are directors of this LLC, Neumann controls 100% of the voting rights of all of its shares, the S-1 says.
We Holdings LLC currently has:
- over 2.4 million shares of Class A common stock
- 111.9 million shares of super voting rights Class B shares, 20 votes per share.
If each share is worth $58, this stake, controlled by Neumann, is worth more than $6.6 billion.
Adam Neumann, again
Jackal Pan / Getty
Neumann also owns at least three other companies that have shares in the parent company We.
These are Anincentco1 LLC, Anincentco2 LLC and Anincentco3, LLC, the S-1 says.
Plus, he owns an undisclosed number of shares in another company called We Company Partnership, which holds 1.06 million Class C shares.
The shares controlled by We Company Partnership are owned by We’s nine directors and executive officers including Neumann, according to the S-1. However, Neumann has sole voting rights, at 20 votes per share, of all of this Class C stock.
Because some of these shares are technically owned by other people, even though Neumann controls the voting rights, the S-1 doesn’t spell out what Neumann’s actual, personal stake is.
But it does disclose all of the shares that Neumann controls:
- over 2.4 million Class A shares
- over 112.5 of Class B shares with super voting rights
- Over 1 million shares of Class C shares
If each share is worth $58, this stake is worth over $6.7 billion. Presumably, the vast majority of that is personally owned by Neumann.
The S-1 does say that Neumann will not sell any shares during the IPO and that his lock-up period will last about a year.
The S-1 doesn’t disclose much financial information regarding Rebekah Neumann, who is named as a co-founder, Chief Brand and Impact Officer and the Founder and CEO of WeGrow.
It says she’s never been paid a salary from the We Co.
WeGrow, by the way, is a subsidiary of We that runs an elementary school. The We Co. says WeGrow plans to expand its education and learning programs.
However, because Adam Neumann is her husband, she is, presumably, co-owner of his vast stake and also most likely one of "permitted transferees" briefly mentioned in the S-1 who can assume control of the stock should he become incapacitated.
If each share that Adam controls is worth $58, she’s party to a stake worth over $6.7 billion.
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