- Billionaire Oracle co-founder Larry Ellison called out WeWork as “almost worthless” in a recent discussion at his house in San Francisco, California.
- According to a report in Barron’s, Ellison offered a scathing take on WeWork’s business model: “WeWork rents a building from me, and breaks it up, and then rents it. They say, ‘We’re a technology company, and we want a tech multiple.’ It’s bizarre.”
- WeWork is preparing for its IPO, but the office co-working company has faced increasing scrutiny following the publication of its S-1 filing. The S-1 document details at least two major cases of self-dealing by WeWork CEO Adam Neumann: Several properties owned by Neumann are leased by WeWork, and Neumann sold the rights to the word “We” to the company for around $6 million.
- As a result, WeWork has placed its IPO on pause and made changes to its governance and some dealings — it was originally supposed to go public this month, but is now said to be aiming for the end of the year.
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Billionaire Oracle cofounder and CTO Larry Ellison called WeWork “almost worthless” in a scathing indictment of the embattled office co-working company.
He made the statement during a meeting with entrepreneurs at his Pacific Heights home in San Francisco, California attended by Barron’s.
“WeWork rents a building from me, and breaks it up, and then rents it,” Ellison said. “They say, ‘We’re a technology company, and we want a tech multiple.’ It’s bizarre.”
Ellison’s statements come after weeks of news stories battering WeWork as the company attempts to go public.
The office co-working company was privately valued at $47 billion when it filed an S-1 for its initial public offering in mid-August.
One month later and WeWork’s parent company is said to have been mulling going public with a valuation in the $10 to $12 billion range. It’s placed its IPO on pause — it was originally supposed to go public this month, but is now said to be aiming for the end of the year.
The story of what happened is complex and still ongoing, but one particular thread stands out from the last month of WeWork news: CEO Adam Neumann’s repeated self-dealing while leading the company.
In the company’s S-1, it was revealed that Neumann owns several properties that WeWork leases from him, and that he sold the rights to the word “We” to WeWork (while serving as CEO) for nearly $6 million. He has since given back the money for the naming rights, and committed to giving his profits from the related real-estate deals back to the company.
WeWork and Neumann have received plenty of criticism in the last month as the company readies to go public, including from New York University’s Stern School of Business professor Scott Galloway, the best-selling author and tech-industry pundit, who deemed the company, “WeWTF” after it filed its S-1.
Former Twitter CEO Dick Costolo piled on this week as well.
“This is not the way everybody behaves,” Costolo told the Wall Street Journal in a profile of WeWork CEO Adam Neumann. “The degree of self-dealing in the S-1 is so egregious, and it comes at a time when you’ve got regulators and politicians and folks across the country looking out at Silicon Valley and wondering if there’s the appropriate level of self-awareness.”
A WeWork representative declined to respond to Ellison’s criticisms.