WeWork CEO Adam Neumann steps down amid the firm’s IPO woes

Adam Neumann has stepped down as CEO of SoftBank-backed co-working firm WeWork, but will stay at the company as non-executive chairman of its board.

WeWork founders Miguel McKelvey (left) and Adam Neumann (right) / Photo credit: WeWork

“While our business has never been stronger, in recent weeks, the scrutiny directed toward me has become a significant distraction,” Neumann said in a statement. “I have decided that it is in the best interest of the company to step down as chief executive.”

WeWork senior executives Sebastian Gunningham and Artie Minson were appointed as co-CEOs. The two said in a statement that they will be “evaluating the optimal timing for an IPO.”

According to a Bloomberg report, Neumann stepped down from his role as head chief upon receiving pressure from the company’s board to do so. With the development, WeWork is looking to salvage a plan to go public, which has been received negatively by its public investors.

WeWork parent The We Company looks to forge ahead with the initial public offering, but people briefed on the deliberations said it’s to happen beyond the original October target date.

See also: WeWork’s IPO prospectus: an initial analysis

According to the report, the WeWork parent is under a strict deadline to go public, as it must proceed with its IPO by the end of 2019 to secure a US$6 billion debt financing that’s contingent on the offering.

Earlier this year, it was reported that the company was looking to raise US$3 billion to US$4 billion in debt ahead of its initial public offering to build up investor confidence. A source also said that the money raised could grow to US$10 billion over the next few years.

Around the same time, Neumann cashed out over US$700 million from the company through stock sales and debt, but still remained as WeWork’s single largest shareholder.