WeWin: A failure of dual class shares in private markets

FOR those incredulous over WeWork founder and now ex-CEO Adam Neumann exiting with US$1.7 billion for his not-profitable office sub-letting company, I recommend the memoir Disrupted by Dan Lyons. Mr Lyons, who is a former Newsweek journalist, provides a first-hand account of working under start-up founders less concerned with their products, customers, vision and, God forbid, profitability, and much more concerned with how to market their firms to the highest bidder.

The real currency in Silicon Valley is an ever-increasing company valuation and the game is to maximise this figure from private and eventually public investors. With the valuation of his firm dropping from US$47 billion to US$8 billion in a mere nine months while walking away a very wealthy man, Mr Neumann is possibly both the greatest and worst player of all time. However, from the position of corporate governance and investor protection, the WeWork initial public offering (IPO) debacle will live on as a cautionary tale.

Red flags from the start