you're used to seeing dramatic changes

over short periods of time.

But nothing in my experience has really compared

to what WeWork has undergone.

I think people felt like they blinked,

and everything was different.

At last reporting,

they're running out of cash very quickly here.

Sources have told Bloomberg

that the company could run out of cash by next month.

I was surprised at the vitriol and the speed

with which investors apparently rejected

what WeWork was trying to do.

From the first day that we started WeWork

it was about bringing people together.

There's an energy that you feel,

that energy is something that's hard to explain,

it's something that either you feel it or you don't.

We like to call it the We Generation.

In less than one year, WeWork went from

one of the most highly valued startups of all time

to losing more than 3/4 of its value.

Ousting its rockstar CEO,

and desperately needing a cash bailout

from its biggest investor just to keep the lights on.

In order to understand how we got here,

we need to take a look

into the mistakes made along the way.

The ambitious vision of WeWork

is effectively dead, period.

This is a case study

of when a company got too much money too fast

with no effective oversight on how to spend it.

They are no longer the market leader,

that company's gonna get smaller,

and it's never gonna be 10 times bigger,

I mean, the story is over.

As late as summer 2019,

the co-working company WeWork

was considered one of the most valuable startups

with a $47 billion price tag,

more than Airbnb, Stripe, and SpaceX.

But in just a few months time that valuation has vanished,

and the very future of the company is in doubt.

To understand how this happened, it all starts

with the company's now former CEO and founder, Adam Neumann.

Adam Neumann is the co-founder of WeWork,

and was its CEO for a long time.

He came over to New York for college

after being in the Israeli Navy.

And started a few businesses, including,

my favorite example is a baby clothes line with knee pads.

His landlord was actually showing him

another building in Brooklyn,

when he came up with the idea

of sort of subdividing that space,

which Miguel McKelvey, his co-founder,

who's a trained architect, sort of came up with the plans,

and then boom, they were away.

They started a company called Greendesk which they sold,

and that was the first iteration of WeWork

which they started in 2010.

WeWork is a new environment for the workspace.

So co-working was sort of where it started.

Today, there's a movement in changing the way people work.

2010 was a great time

to be starting a co-working company in New York City.

There were a bunch of landlords

with empty office buildings, vacancies,

WeWork actually presented a solution for them.

The very first building down in Grand Street

in Downtown Manhattan was where WeWork

launched its first co-working spot,

and from there it was sort of boom.

From 2010 to 2011, it doubled in size.

And from then on the growth was exponential.

Some of their original investors

were people who were involved in commercial real estate.

They got some early investment

from a venture capital firm called Benchmark,

and eventually sort of kept growing,

kept taking on new leases and started to grow the business

starting in New York City.

Business grew quickly and by 2015,

the company already quadrupled its valuation

to $10 billion, counting 23,000 customers,

paying memberships in 32 locations,

renting desks for as little as $45 per month.

WeWork's whole idea was,

let's not just be a commercial office leasing company,

let us accelerate the new world

of how people work and make it better.

Community, being surrounded

by a group of like-minded individuals,

being part of something bigger than yourself

inspires people to work harder, spend more time at work,

and just have fun doing it.

And initially, this attracted the attention

of young entrepreneurs looking to expand their companies.

We thought it's about time

to give you a tour of where WeWork.

A tour of where WeWork, a tour of where WeWork .

You got your cokes, you got your Red Bulls.

Incredible group of people, everyone that I've met

through the WeWork community's been absolutely awesome,

and all the staff here are incredible.

It's almost like a cult-like sensation

that they created with the very early employees,

sort of realizing that WeWork was more than a company.

It was a bit of a family, it was a community,

and the members too sort of realized that,

they realized they could lean on each other

in terms of networking,

in terms of growing their own businesses.

This excitement drew in

even more investors to the company.

Adams and his company, it's not 2.0 it's 10.0.

I mean, he's taken it to really the next level.

And when you walk into their space,

and you see the energy, you see the excitement,

you see the interaction.

It's a very, very powerful concept.

And the most crucial investor

would be SoftBank.

I would say the time

that I think WeWork really started to take off

was when SoftBank invested in them in 2017,

that gave them a valuation of $20 billion.

And that's really when you start to get into the high ranks

of other venture-backed private companies.

With SoftBank's investment,

WeWork quickly expanded its footprint throughout the world.

And it's the beginning also of this partnership

between Adam Neumann and Masayoshi Son,

who's the head of SoftBank.

They have this meeting that is often told again and again

in the lore of WeWork,

where Adam made this pitch, and Masa said,

"That's great, but let's make it even bigger."

WeWork is actually one of over 80 companies

that SoftBank Vision Fund has backed

with its over $100 billion.

SoftBank's idea is, there's lots of money out there

in this unique period of transformation,

let's make everything happen faster with more money.

And let's enable companies that have smart ideas

to get even more ambitious, bigger, and faster.

Between 2017 and 2018,

SoftBank would invest around $8 billion into WeWork,

doubling its valuation to 20 billion in 2017.

In 2019, SoftBank floated

a potential $16 billion investment,

which would give them a controlling stake in the company.

Ultimately, they would scale back to just $2 billion,

but it was enough to double

WeWork's valuation again to 47 billion.

So at 47 billion, which is a little bit

of an illusory number, it's not real.

But that put WeWork in the very top tier

of high valued young startups.

So the reaction from a lot of the real estate world

was, "Wow, that's crazy."

In part because there's a company

that trades in the UK, called IWG,

used to be known as Regus.

It trades at a fraction of that

and people were looking at that company,

which is profitable, and WeWork which is not,

and wondering what the geek is,

why people didn't understand

what SoftBank maybe knew that they didn't.

And that's because in many measurable areas

like global square footage, members, locations,

countries, revenue, and profit

IWG is either similar or much higher than WeWork,

except, of course, for one area, valuation

Where WeWork was valued nearly 13 times higher than IWG.

We, of course, looked at that every single day and said,

"What are we missing?

"Is there something that we're not doing?

"Is there something in that we're missing?

"Is there an ingredient, that sort of there

"that we are missing out on

"that we can add into what we're doing?

But we never found it.

After getting these investments from SoftBank

and license to spend quickly,

that's just what WeWork did.

Opening more and more offices around the world

making investments in a variety of different companies,

and even opening an elementary school in New York City.

It's almost stuff of legend right now,

how recklessly WeWork spend its money

on things from a company that makes wave pools,

to a company that makes super foods,

led by a guy that Adam met while he was surfing.

When you see a startup,

that's in the commercial real estate sector,

investing in an indoor wave pool company,

and in a children's school,

you know something has gone wrong.

But just how wrong wouldn't be fully realized

until WeWork announced in August of 2019,

that it would file for a public offering.

It was the first time since a bond offering last year

that investors were able to peel back the curtain,

and see into the company's financial performance,

read its metrics, see its growth.

And I got up really early,

and I was reading it,

and I remember on my way into the office,

and it was still dark outside,

and there was a small line, and just a couple of lines

about how Adam Neumann, the CEO,

he had personally purchased the trademark to the word, We.

And had sold that back to his own company for $5.9 million.

And I looked at that, and I thought, "That's kind of weird."

This was just one of many examples

of how the corporate leadership, including Adam Neumann,

seemed to find opportunities to enrich themselves

at the expense of shareholders

and at the expense of the company.

The filings also showed

in just the first six months of 2019,

WeWork last $690 million,

bringing its total losses to almost $3 billion

in the past three years.

Things start changing rapidly.

Investors are telling WeWork and it's bankers,

"You know what, this isn't for us."

People are throwing out numbers as low as 12,

potentially even as low as 10 billion.

And all these things that raised a few red flags,

just started, it kind of added fuel to the fire

of this discussion of is this company ready to go public,

it just doesn't feel like it has the controls in place

that you would expect of a public company

that needs to protect the value for shareholders.

On September 17th,

WeWork officially pushed back

it's much awaited Initial Public Offering.

We have decided to postpone our IPO

to focus on our core business,

the fundamentals of which remain strong.

The board, and in particular SoftBank

its biggest investor, decide that

there needs to be a big change

it needs to come from the top,

and that Adam is now more of a liability

toward the company than he is an asset.

on September the 24th, he resigned saying,

"Too much focus has been placed on me."

He realized he was a distraction to the company,