SoftBank, WeWork's Largest Investor, Takes Control of the Embattled Office Company, With Co-founder Adam Neumann Stepping Down The $8 billion deal is dramatically less than the office company's original valuation of $47 billion.

By Meghan Morris

This story originally appeared on Business Insider

WeWork via Business Insider

SoftBank, WeWork's largest investor, is attempting to rescue the embattled office company with a bailout plan reported Tuesday by The Wall Street Journal.

The deal will value WeWork at about $8 billion, per The Journal, far less than the $47 billion valuation from SoftBank's January investment.

Related: Anti-Climax: Poster Boy for Start-ups Adam Neumann Steps Aside

The Japanese investor will provide the WeWork cofounder Adam Neumann with almost $1.7 billion. He'll sell nearly $1 billion of stock to SoftBank, step down as board chairman, and receive a $185 million consulting fee as well as a $500 million credit line, The Journal said. Neumann will maintain a stake in the company and stay on as a board observer -- someone who attends board meetings but does not vote.

SoftBank's $1 billion stock purchase will be part of a larger $3 billion tender offer to other employees and investors, The Journal said.

Full details of the deal are not yet clear. Representatives for SoftBank and WeWork did not immediately respond to requests for comment. Neumann's spokeswoman declined comment until the official announcement is made.

Reuters reported on Monday that the company would offer WeWork $5 billion in debt; accelerate a $1.5 billion equity commitment scheduled for next year; and buy $3 billion worth of stock from investors including Neumann. SoftBank would own 60 percent to 80 percent of WeWork.

Related: WeWork Files for IPO, Revealing Spiraling Losses of $1.6 Billion

WeWork earlier this year was in talks to borrow $6 billion from banks, a deal contingent on raising at least $3 billion in a public float. But after the company released its initial-public-offering filing in mid-August, investors, analysts, and the media highlighted problems with its business model, conflicts of interest, and leadership. Six weeks later, WeWork's board of directors ousted the controversial Neumann as CEO and replaced him with two co-CEOs, who shelved the IPO indefinitely.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Side Hustle

'I Was Called Crazy': This 27-Year-Old's Side Hustle Hit $30,000 a Month in Under a Year — Now It's Worth Millions

Changing regulations forced Angel Rodriguez's jet ski rental company to shut down, and the young entrepreneur had to figure out his next move — fast.

Side Hustle

This 30-Year-Old's $6,000-a-Month Side Hustle Started Making Money 'Immediately' — But He's Not Quitting His Day Job

Derrick Mathy works in orthopedic surgical device sales and is on a mission to bring people together in real life.

Business News

'Unprecedented in Our 53-Year History': Southwest Airlines Announces Its First Mass Layoffs Ever

The airline is eliminating 15% of its corporate workforce, including many in senior leadership positions.

Business News

Elon Musk's xAI Claims Its New Grok 3 AI Is Better Than ChatGPT and DeepSeek: 'Seeing the Beginnings of Creativity'

xAI debuted the new AI on Monday, claiming it has 10 times the computational power of Grok 2.

Business News

Your Old Apple AirPods Can Soon Act as an Over-the-Counter Hearing Aid, According to the FDA

The new software is compatible with the Apple AirPods Pro and accessible through iOS — for free and now FDA-authorized.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.