“It reminds me of some of the dotcom busts,” he said.
In January of this year, WeWork was worth $47 billion and was ready to go public. To do so, Varney said, he had to take a good look at his company’s finances.
But instead of meeting with bankers, Varney said he was too busy vacationing.
“He was surfing in the Maldives and refused to cut his vacation short,” he said. “Eventually, he returned to his mansion in the Hamptons where he held court.”
Varney said Neumann invited New York Stock Exchange and NASDAQ leaders to “compete” for his listing and demanded they “ban meat and plastic straws from their cafeterias.”
“Neumann is a visionary, intent on saving the planet!” Varney said.
When the financial document surfaced, Varney said, “it was a bomb.”
“He’d been self-dealing,” Varney said. “He'd trademarked his own name and sold it to his own company. He’d put relatives in key roles, including his wife, who could take control of the company.”
But the worst part is, WeWork was burning through billions and had “no clear path” to a profit.
“That did it,” Varney said. “The public offering was canceled. Investors fled. That was the moment when pie-in-the-sky start-up dreams crashed, and investors started to demand a profit.”
Varney said Neumann spent days with “advisers” while plotting his exit from the company. Meanwhile, WeWork layoffs begin this week and Neumann still sits on billions of dollars.
According to Varney, reportedly one-third of employees are on the way out.
Varney said the sad part of this story is that investors were so gullible; that a “visionary” could confuse smart investors.
“When things fell apart, the man behind the whole charade gets a billion,” he said. “And the ground-floor people, who built WeWork, are on the ground floor all right — out on the street!”