What WeWork’s New CEO’s Past Tells Us About the Company’s Future

By Franco Faraudo

Yesterday, WeWork ended monthlong speculation about who would be the executive in charge of turning the struggling co-working company around. The appointment was not one of a new, high-profile leader. In fact, the CEO that they chose has been acting as interim CEO since the former CEO, Sandeep Mathrani, stepped down in May. David Tolley has now been made permanent CEO of the company.

Tolley is a bit of an enigma; he has an account on LinkedIn but has never posted (I’m not mad, I’m impressed). His background is not in real estate or the workplace but in satellites. He was most recently the CFO and Co-Chief Restructuring Officer of Intelsat. Prior to that, he was the CFO at another satellite communications company, OneWeb. Running a global satellite company is impressive, but what does he bring to the table that makes him a good candidate for WeWork?

It might have something to do with his role as Chairman of the Board of Directors at New Skies Satellites. It was there, back in 2004, that Tolley led a “public-to-private acquisition” that sold controlling interest in the company to his former firm, Blackstone, for $160 million. New Skies then went on to re-IPO and eventually was acquired by another company called SES Global. The move earned Blackstone an estimated $400 million in profit and was largely seen as a win for New Skies.

WeWork might be pursuing a similar strategy. WeWork’s troubles started (or rather were exposed) when it IPO’d. Since then, the stock has been on a steady decline, and it’s down from its high of $520 per share in 2020 to just under $2.30 a share now, giving the company a market cap of only $121 million. Finding the right private equity partner to purchase controlling interest would help them stop the bleeding and put them in a better position with their lease renegotiations.

I might be overthinking the decision to appoint Mr. Tolley, but I hope for WeWork’s sake that I am not. The most troubling thing about the decision was that Tolley was the interim CEO. That gives the perception that they probably shopped the job around to other candidates during these last 6 months and did not find a taker. WeWork’s chair of the Board of Directors Paul Keglevic had this to say: “David is a proven leader, with an exceptional track record of running complex and high-impact businesses, and has brought immense energy, discipline, and focus to WeWork since stepping into the role on an interim basis in May. We are confident that David is the right leader for this pivotal moment and in his ability to drive WeWork’s continued transformation.” If he is a strategic decision, that would be a much better look for WeWork than if he was just the guy who got stuck with the job.

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