This is what really brought down WeWork

Originally written by Alex Castro for Fast Company

In a very public and dramatic fall, WeWork, the coworking company originally valued at $47 billion, has sunk to a rescue position of a mere $5 billion, leaving many investors wondering: “Was it ex-CEO Adam Neumann’s fault?”

Neumann made plenty of mistakes that he attempted to undo, including selling a $60 million private jet and paying back the $5.9 million the company paid him to use the word “We” as a trademark. But the root of WeWork’s problem goes much deeper than an outrageous leader. In fact, it’s a problem affecting the entire market.

WeWork’s valuation was based on little more than hype and unchecked fervor. 

Rather than being an isolated incident, WeWork’s downfall is an indicator of an epidemic where good ideas are being limited by old thinking and outdated management theory. The company is one of the latest highly visible examples of an overvalued initial public offering (IPO). We’ve seen this exaggerated valuation happen before, and we’ll see it again. UberEndeavor Group HoldingsSmileDirectClub, and Peloton have all either failed to IPO or suffered significant dips in 2019 alone. What is actually causing these companies to lose?

 

Full Article on Fast Company
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