I'm all for letting a company die out, but jesus it looks like there were a ton of shady business dealings, hidden partners, reverse mergers and other sketchy moves.
This article should, at the very least, be a warning sign to anybody who thinks about investing with, or going to work for any of the people associated with any of the firms listed in the article.
This is kind of sad. It was /is a functioning profitable public company with employees. A PE firm decides to take a huge loan to buy it, and now the company is gone. All those people lost their jobs. A huge net negative on the world and society because of greedy PE.
Before I got there they rolled the dice and walked away from a $250MM acquisition offer and ousted their original CEO. They were somehow able to acquire additional funding before I left but, based on the numbers I saw, they were using questionable models to indicate that they were more profitable than they are.
They still exist and will probably take another 18 months to wither and die. The experience taught me to look hard for red flags and to hold my company as accountable as myself.
what a sad story. It's an interesting tale oddly in favor of letting nepotism happen. The story definitely reads like some activist investors righteously decapitated the company for nepotism, but then were left with a dead body.
One great company after another destroyed by financial shenanigans. Avaya & Silver Lake Partners is another that comes to mind, but there have been many.
Being evil. This is the group that invested in LinkedIn, PayPal and now recently Facebook after the scandals. If they went out of business, all I would say is, lol
I don't know the details of when the news broke, but I'd be interested to know how many people at We knew that Neumann owned some of the properties they were renting and not WeWork. Because if I knew that self-dealing was going on, I definitely wouldn't work there. If I found out, I'd try and leave as soon as possible.
I can't imagine what it feels like to be at a promising startup with options and people are floating a 47-60 billion valuation at you, only to have a bunch of shady business come to light and then have that value evaporate before it was ever realized. Even if you didn't act on it, and pretended it was a lottery ticket - the emotional toll must be excruciating. I really empathize with the boots on the ground at some of these companies, they're working hard just like the rest of us.
Oh yeah there's definitely plenty more than I mentioned. But I just wanted to highlight that his reputation as this sort of accidental Grim Reaper of companies originated in the GFC back in 07/08
Its a good post - but it must be said: the CEO (and board?) fucked up hardcore. They let themselves be tempted by acquisition, and then didn't protect themselves or the team in negotiations.
If feels sinister because the company didn't need to borrow money.
A business that was adequately servicing investors, employees, and customers, has been destroyed because a small group tried to extract more wealth from the company than it could sustain.
It really does seem like a historic moment in business history. I'm strugling to think of a precedent, other than cases of outright fraud, where a prominent firm (= its management) experienced so much negative publicity and self-owning.
I have worked in a third-grade infrastructure company in India. Everyone in top management (including founder) was corrupt. Their business practices were always about bribing, siphoning off investors money, inflating assets, money laundering and so on. When it was trying to go public, it hired one of 'big 4' to do the auditing and other due diligence. Once it went public, that agency was fired (2 years after going public). With in 6 years, that company became bankrupt.
Everyone knew that one of 'big 4' was hired to make the prospects of going public legit and credible. That consulting firm made things look right in exchange of big bucks.
This still happens today, living through it now. This company was raided/bought recently with an immediate 7% layoff. More to come as they push all acquired business units to jump from 18% margin to 40% margin in a year. Legacy black boxes no one understands now, let alone when they RIF another 2000 people.
It’s really sad to see 1000s of years of people’s work and toil washed away this way. Really drives home that nothing we do in this field has any meaning certainly not permanence.
I'd recommend you get out of there in that situation. I've personally had something similar and it wasn't fun being caught in the wreckage when it turned out the CEO had lied about certain investments.
This article should, at the very least, be a warning sign to anybody who thinks about investing with, or going to work for any of the people associated with any of the firms listed in the article.
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