Adam Neumann, the ousted founder of WeWork, is reportedly seeking external funds to acquire the company and pull it out of bankruptcy. The potential financial backers include prominent Wall Street figures like Dan Loeb's hedge fund Third Point among others, a development that led to WeWork's stock doubling on February 6. However, Third Point clarified that it has not committed to any financing and discussions with Neumann are still in the "preliminary stages."
According to a letter from Neumann's lawyer, Alex Spiro, Neumann and his startup Flow have been expressing a "genuine interest" since December 2023 in acquiring WeWork and its leaseholds to free the company from bankruptcy or to provide debtor-in-possession (DIP) financing.
Third Point stated to the media that it has only had preliminary discussions with Flow and Neumann about their ideas for WeWork and has not committed to any transaction.
A spokesperson for WeWork commented, "WeWork is an extraordinary company. As such, we receive expressions of interest from external parties on a regular basis. We and our advisors always review those approaches with a view to acting in the best interests of the company."
The letter reveals Neumann's attempts to acquire WeWork date back before December last year, with a financing arrangement of up to $1 billion being organized in October 2022, which was rejected by WeWork's former CEO Sandeep Mathrani. Although WeWork's advisors were against Neumann's acquisition intentions, they ultimately suggested Neumann provide DIP financing instead of an investment letter of intent. It is not immediately clear from the letter whether WeWork and Neumann's team have signed a non-disclosure agreement (NDA), although it mentions ongoing exchanges about a revised draft of an NDA.
Boosted by this news, WeWork's stock soared by 100% during trading on February 6, reaching $0.20.
WeWork filed for bankruptcy in November 2023 after years of financial struggles. Neumann resigned in 2019 amid concerns from investors over the company's governance and valuation.
A WeWork spokesperson added,"We continue to believe that the work we are currently doing - addressing our unsustainable rent expenses and restructuring our business - will ensure WeWork is best positioned as an independent, valuable, financially strong and sustainable company long into the future."
