Adam Neumann was flying high. Literally.
His office-rental giant WeWork was months away from being valued at $47 billion. Revenue was doubling annually. And Mr. Neumann was zipping across the Atlantic Ocean in a Gulfstream G650 private jet with friends last summer, smoking marijuana.
After the group landed in Israel and left the plane, the flight crew found a sizable chunk of the drug stuffed in a cereal box for the return flight, according to people familiar with the incident. The jet’s owner, upset and fearing repercussions of trans-border marijuana transport, recalled the plane, leaving Mr. Neumann to find his own way back to New York, these people said.
Since Mr. Neumann co-founded WeWork—recently renamed We Co.—with Miguel McKelvey nine years ago, he has led with unusual exuberance and excess. His combination of entrepreneurial vision, personal charisma and brash risk-taking helped the company surpass $2 billion in annual revenue, and made it the country’s most valuable startup.
Now many of the same qualities that helped fuel his company’s breakneck growth in the private market are piling up as potential liabilities as the company prepares to go public—helmed by a CEO who looks little like a typical public-company chief.
Mr. Neumann muses about the implausible:
- becoming leader of the world,
- living forever,
- amassing more than $1 trillion in wealth.
Partying has long been a feature of his work life, heavy on the tequila.
Public investors are increasingly skeptical of the formula that has worked for Mr. Neumann so far: his pitch that We is far more than a real-estate company. With its rapid growth and use of technology, he argued, the company deserves rich valuations normally reserved for tech companies.
Instead, many potential investors now see a fast-growing office subleasing company with losses of more than $1.6 billion last year.
Since We filed the prospectus for its initial public offering last month, it has been besieged with criticism over its governance, business model and ability to turn a profit. It is now expecting an IPO valuation as low as a third of the $47 billion sticker price it garnered in a January funding round—a drop without recent precedent. This week, We postponed the offering until October at the earliest.
Wall Street and Silicon Valley investors have been dismayed by the number of potential conflicts of interest disclosed in the “S-1” IPO prospectus, including Mr. Neumann leasing properties he owns back to the company and borrowing heavily against his stock. Even some of We’s private investors said they were angered to learn that an entity Mr. Neumann controls sold the rights to the word “We” to the company for almost $6 million—before public pressure led him to unwind the deal.
“This is not the way everybody behaves,” said Dick Costolo, former CEO of Twitter Inc., who led the company through one of the larger tech IPOs of the past decade. “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.”
Given the prominence of the IPO, he added, “that is a big problem.”
Mr. Neumann, 40, declined to comment through a spokesman, who cited rules surrounding the planned IPO. Mr. Neumann told We employees Tuesday the process had been humbling and he would learn from it, say people who heard him. We executives have previously said he is strongly devoted to the company, and many of his personal transactions were made with the company’s best interests at heart.
This account is based on interviews with current and former employees, investors and friends who interacted with Mr. Neumann as he built We.
For startup investors, the 6-foot-5 Mr. Neumann has always had the qualities they crave in Silicon Valley founders, despite being based in New York. He is intensely ambitious and a masterful storyteller with a magnetic personality who can inspire and sell.
Raised in Israel on a kibbutz, Mr. Neumann moved to the U.S. when he was 22, where he attended Baruch College and tried to start businesses. One was a collapsible heel on women’s shoes that didn’t get off the ground. Working out of his Tribeca apartment, he started Krawlers, which sought to make baby clothes with knee pads to make crawling more comfortable. The slogan, he has said: “Just because they don’t tell you, doesn’t mean they don’t hurt.” It never gained traction.
He and Mr. McKelvey started a small co-working space on the side during the recession that followed the financial crisis and were amazed by the demand.
By 2010, they had started WeWork, with essentially the same core business model that exists today: They lease an office long-term, renovate it to make it hip and inviting, and sublease smaller desks and offices short-term.
British lawmakers on Tuesday rose up against Prime Minister Boris Johnson, moving to prevent him from taking the country out of the European Union without a formal agreement. The epic showdown has Britain on the verge of a snap general election.
After losing his first-ever vote as prime minister, Mr. Johnson stood up in Parliament and said he intended to present a formal request for an election to lawmakers, who would have to approve it.
A little over a month ago, Mr. Johnson, a brash, blustery politician often compared to President Trump, swept into office with a vow to finally wrest Britain from the European Union by whatever means necessary, even if it meant a disorderly, no-deal departure.
Now, Parliament has pulled the rug out from under him, and Mr. Johnson is at risk of falling into the same Brexit quagmire that dragged down his predecessor as prime minister, Theresa May.The lawmakers forced his hand by voting by 328 to 301 to take control of Parliament away from the government and vote on legislation as soon as Wednesday that would block the prime minister from making good on his threat of a no-deal Brexit.
That prompted an angry response from the prime minister.
“I don’t want an election, the public don’t want an election, but if the House votes for this bill tomorrow, the public will have to choose who goes to Brussels on Oct. 17 to sort this out and take this country forward,” Mr. Johnson said, referring to the next European Union summit.
Tuesday was a critical moment in Britain’s tortured, three-year effort to extract itself from the European Union. The saga has divided Britons, torn apart the ruling Conservative Party and prompted complaints that Mr. Johnson has trampled the conventions of the country’s unwritten constitution.
A majority of lawmakers are determined to block a withdrawal from the European Union without a deal, which they believe would be disastrous for the country’s economy. Tuesday’s vote suggested they have the numbers to succeed.
Mr. Johnson’s aides had made clear that, in the event of a defeat on Tuesday, he would seek a general election on Oct. 14 — just a little over two weeks before the Brexit deadline of Oct. 31.
The accelerating pace of events suggests that Britain’s Brexit nightmare may finally be approaching an endgame after years of paralysis.
Tuesday’s vote also marked the moment when Mr. Johnson’s hardball tactics, for once, were met with equal resistance.
On a day of high drama, Mr. Johnson lost his working majority in Parliament even before the vote took place, when one Conservative rebel, Phillip Lee, quit the party to join the Liberal Democrats, who have managed to stage a resurgence by positioning themselves as an unambiguously anti-Brexit party.
The practical effect of Mr. Lee’s defection for Mr. Johnson was limited, however, because the government would fall only if it were defeated in a confidence motion.
But in moment weighty with symbolism, Mr. Lee walked across the floor of the House of Commons and sat beside Jo Swinson, the leader of the Liberal Democrats, as the prime minister was speaking about the recent Group of 7 summit. Mr. Lee accused Mr. Johnson of pursuing a damaging withdrawal from the European Union in unprincipled ways, and of “putting lives and livelihoods at risk.”
Mr. Lee’s break with the Tories was most likely just the first of many.
On Tuesday, Downing Street said it would press ahead with plans to discipline those rebels who voted against the government by expelling them from the Conservative Party in Parliament. They include two former chancellors of the Exchequer, Philip Hammond and Kenneth Clarke, and Nicholas Soames, the grandson of Winston Churchill.
That could threaten Mr. Johnson’s ability to manage day-to-day business in Parliament, underscoring the need for a new election.
The extent of the Tory civil war was on full display as several of Mr. Johnson’s Conservative critics, including the former chancellor of the Exchequer, Philip Hammond, lobbed hostile questions at him, making it plain that they had not been brought back into line by threats of expulsion from the party.
Opponents of a no-deal Brexit argue that Mr. Johnson’s promise to leave the bloc without a deal, if necessary, would be catastrophic for the British economy. Many experts say it could lead to shortages of food, fuel and medicine, and wreak havoc on parts of the manufacturing sector that rely on the seamless flow of goods across the English Channel. Leaked government reports paint a bleak picture of what it might look like.
Mr. Johnson says he needs to keep the no-deal option on the table to give him leverage in talks in Brussels, because an abrupt exitwould also damage continental economies, if not as much as Britain’s. The prime minister appealed to his own lawmakers not to support what he called “Jeremy Corbyn’s surrender bill,” a reference to the leader of the opposition Labour Party.
“It means running up the white flag,” he said.
Mr. Johnson also claimed to have made progress in talks with European Union leaders, although his own Brexit secretary, Stephen Barclay, on Monday gave a much less rosy assessment of the state of negotiations.
Britain’s main demand is for the European Union to ditch the so-called Irish backstop, a guarantee that the bloc insists it needs to ensure that goods flow smoothly across the Irish border whatever happens in trade negotiations with Britain. Mr. Johnson said he planned to visit Dublin next week for talks with his Irish counterpart, Leo Varadkar.
Conservative rebels believe Mr. Johnson is more interested in uniting Brexit supporters behind him ahead of a general election than in securing an agreement in Brussels.
One former chancellor of the Exchequer, Kenneth Clarke, accused Mr. Johnson of setting impossible conditions for the negotiations, attaching as much blame as possible to the European Union for the failure to get a deal and then seeking to hold a “flag-waving election” before the disadvantages of leaving without an agreement become apparent.
The bitter dispute has taken Britain into new political territory.
Last week, Mr. Johnson provoked outrage by curtailing Parliament’s sessions in September and October, compacting the amount of time lawmakers would have to deal with the most crucial decision the country has faced in decades.
Mr. Johnson’s allies argue that it is the rebels who are subverting the principles of Britain’s unwritten constitution by seizing control of the proceedings of Parliament that are normally the preserve of the government.
The European Commission said on Tuesday that while the frequency of meetings between its Brexit team and the British negotiator, David Frost, had increased, little headway had been made toward avoiding a hard border between Ireland and Northern Ireland.
Asked whether the British government was using reports of its talks with the commission for political purposes at home, the commission’s spokeswoman, Mina Andreeva, said that the body was “an honest broker, as always.” She said she could not “report any concrete proposals having being made that we have seen.”
Mr. Hammond, a senior member of the cabinet two months ago, told the BBC on Tuesday that Mr. Johnson’s claim of progress on the negotiations was “disingenuous.”
To add to the turmoil and confusion, the opposition Labour Party suggested it might thwart Mr. Johnson’s attempt to push for a general election, should it come to that. Under a 2011 law, the prime minister needs a two-thirds majority to secure a snap election, although it is possible that the government might try to legislate to set that provision aside, a move that would mean it needs only a simply majority.
There is so little trust in British politics that Mr. Johnson’s opponents fear that he might request an election for Oct. 14 but then switch the date until after Oct. 31 as part of a move to lock in a no-deal withdrawal.
Labour has said that its priority is to stop Britain leaving the European Union without a deal, because of concerns about what such a departure would mean for the economy.
But Labour’s stance underscores that the backdrop to everything in British politics is a sense that a general election is looming, with key players maneuvering for the most advantageous moment.
Uber was the most valuable private company in history, but the public market has not been as enthusiastic. The reason explains a lot about how the tech industry works.
But some of it should go to Silicon Valley’s cultural divergence from the business reality. Investors loved the company not as an operating unit, but as an idea about how the world should be. Uber’s CEO was brash and would do whatever it took. His company’s attitude toward the government was dismissive and defiant. And its model of how society should work, especially how labor supply should meet consumer demand, valorized the individual, as if Milton Friedman’s dreams coalesced into a company. “It’s almost the perfect tech company, insofar as it allocates resources in the physical world and corrects some real inefficiencies,” the Uber investor Naval Ravikant told San Francisco magazine in 2014.
Jair Bolsonaro spent most of his career on the political fringe, until his message started to resonate with a country reeling from economic hardship and a widespread corruption scandal.
President Trump welcomed Brazil’s far-right president, Jair Bolsonaro, to the White House on Tuesday. We look at the back story of Mr. Bolsonaro, whose campaign tactics, incendiary rhetoric and brash style have earned him the nickname “Trump of the tropics.”
Standing next to Mr. Trump at the White House, Mr. Bolsonaro pledged that the United States and Brazil would “stand side by side in their efforts to ensure liberties and respect to traditional family lifestyles, respect to God our creator against the gender ideology or the politically correct attitudes, and against fake news.”
Mr. Bolsonaro has a long record of polarizing comments, but many Brazilians see in him the kind of disruptive, status quo-breaking potential that propelled Mr. Trump to victory in the United States.
Mr. Bolsonaro, who has vowed to clean up entrenched political corruption, is now fending off corruption allegations against his own administration.