WeWorking Hard To Make Sure WeRich. WeWork Co-Founder Adam Neumann Got The Ball Rolling On SPAC IPO With One Phone Call.

Adam Neumann, co-founder and CEO of WeWork, attends the opening bell ceremony at Nasdaq, Tuesday, Jan. 16, 2018, in New York. WeWork is a privately held shared workspace company based in New York. (AP Photo/Mark Lennihan)

When an ousted CEO gets on a Zoom call with the owner of a National Basketball Association team, anything can happen.

It turns out Adam Neumann helped his former company, WeWork, into what could be billions in profits because Sacramento Kings owner Vivek Ranadive, the head of a special purpose acquisition company (SPAC) called BowX, green-lighted a deal.

That interaction last November led to SoftBank Group’s $9 billion deal to take WeWork public.

Neumann, who co-founded WeWork in 2010 before being ousted in September 2019, had been fighting a legal battle with SoftBank over a $3 billion deal for a portion of his and other investors’ stake in the shared-workspace company.

The Zoom call, according to sources in a Reuters report, preceded discussions Ranadive had with WeWork.

Neumann promoted WeWork’s credentials during the call, raising Ranadive’s interest, the sources said, but had nothing to do with the SPAC deal after that.

Ranadive and his team began discussions with WeWork in December.

And Ranadive’s SPAC was the only one willing to target WeWork, after raising $420 million in an IPO in August.

The deal announced on Friday helps out SoftBank, which put $18.5 billion into WeWork since 2017.

The pandemic caused WeWork fortunes to drift south, given the shift to remote work due to the outbreak. WeWork runs 800 shared work spaces across 152 cities.

SoftBank reached a settlement with Neumann and other investors in February to pay out about half of its original commitment, according to Reuters.

Neumann will be fine, as well. He has about a 10% stake in WeWork, worth around $790 million.

BowX shares were up 20% following the merger’s announcement Friday.

Ranadive and BowX’s senior team will receive WeWork shares worth almost $90 million after investing $11.7 million of their own money.

 

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