Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

WeWork co-founder and CEO Adam Neumann, speaking earlier this year in L.A. Photo by Michael Kovac/Getty Images for WeWork.

WeWork co-founder and CEO Adam Neumann is under scrutiny based on a Wall Street Journal report that he's "cashed out more than $700 million from the company ahead of its IPO through a mix of stock sales and debt."

Behind the scenes: A source tells Axios that around $300 million was in the form of stock sales, most recently via an October 2017 tender offer from WeWork investor SoftBank. The remainder was loans.

Why it matters: Startup founders used to be discouraged from taking any equity out of their still-private companies, under a theory that it misaligned interests. That has changed over the past decade, with some investors arguing that founders can be more focused if they needn't worry about things like mortgages and car payments.

Neumann's haul is much larger than what is needed to satisfy such responsibilities, but he's said to remain the company's largest single shareholder, and the loans were taken out against the value of WeWork stock. In other words, he retains very significant incentives to build the business and make it profitable.

A source close to WeWork says that Neumann does not plan to sell shares in the company's IPO.

  • Neumann used some of the $400 million in loans to exercise stock options in WeWork, per the source.
  • Some of the proceeds, as the WSJ reported, were used to buy interests in commercial buildings that later leased space to WeWork. This arrangement is seen by some critics as self-dealing, and by some supporters as doubling down on WeWork (which, particularly in its early days, was not viewed by all landlords as a stable tenant).
  • Neumann also is said to have made around $100 million in charitable donations, per the WSJ, although no recipients were identified.

WeWork has launched employee stock tender offers subsequent to October 2017, but Neumann has not participated. The company is expected to hold a pre-IPO investor day on July 31, and is still considering a large debt deal prior to going public.

Go deeper: WeWork discloses earnings, CEO discloses why it might go public

Go deeper

Updated 2 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Health: WHO: AstraZeneca vaccine must be evaluated on "more than a press release."
  2. Politics: Supreme Court backs religious groups on New York COVID restrictions.
  3. Economy: Safety nets to disappear in DecemberAmazon hires 1,400 workers a day throughout pandemic.
  4. Education: U.S. public school enrollment drops as pandemic persists — National standardized tests delayed until 2022.
  5. Cities: Los Angeles County issues stay-at-home order, limits gatherings.
  6. World: London police arrest dozens during anti-lockdown protests — Thailand, Philippines sign deal with AstraZeneca for vaccine.

Tony Hsieh, longtime Zappos CEO, dies at 46

Tony Hsieh. Photo: FilmMagic/FilmMagic

Tony Hsieh, the longtime ex-chief executive of Zappos, died on Friday after being injured in a house fire, his lawyer told the Las Vegas Review-Journal. He was 46.

The big picture: Hsieh was known for his unique approach to management, and following the 2008 recession his ongoing investment and efforts to revitalize the downtown Las Vegas area.

Dan Primack, author of Pro Rata
9 hours ago - Economy & Business

The unicorn stampede is coming

Illustration: Annelise Capossela/Axios

Airbnb and DoorDash plan to go public in the next few weeks, capping off a very busy year for IPOs.

What's next: You ain't seen nothing yet.

Get Axios AM in your inbox

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!