When WeWork's directors voted on Tuesday to oust Adam Neumann as chief executive after a failed attempt to take the office-sharing start-up public, Mr Neumann cast his vote against himself, according to three people familiar with the situation.
The vote by Mr Neumann, who remains non-executive chairman but gave up majority control of the company he co-founded, was the culmination of a stunning coup to remove him led by his biggest backer, Masayoshi Son, the billionaire chief executive of SoftBank Group, these sources said.
Mr Neumann's downfall came after WeWork's parent, We Company, spent months preparing for an initial public offering, only to have to postpone its plans last week. The IPO was postponed as estimates of the company's value fell by tens of billions of dollars amid investor concerns about its corporate governance under Mr Neumann and its ability to generate a profit.
The falling estimates came as a shock to Mr Son, who had ploughed in more than $10 billion to WeWork, the last investment giving it a $47bn valuation, according to three people familiar with the matter.
At that level, WeWork was the world's fourth-most valuable private start-up, according to data firm CB Insights. By the time the IPO was pulled, estimates of WeWork's value had come down as low as $10 billion.
By last weekend, some WeWork directors started to lay the groundwork for Mr Neumann's departure, according to a source familiar with the seven-member board's deliberations.
The notion would have been unthinkable only a few months ago, with the WeWork brand strongly tied to the flamboyant, freewheeling entrepreneur who has said that his company's mission was to "elevate the world's consciousness".
The substance of the message to Mr Neumann from them: "Listen, this IPO has gotten distracted by you," the source said.
Mr Neumann decided to back the management changes because he became convinced they were in the best interest of the company, according to a person close to him. He owns about a quarter of WeWork, sources have previously said, tying much of his wealth to the company. WeWork has not disclosed what percentage of the company he owns.
Mr Neumann did not respond to calls and emails requesting an interview.
SoftBank and WeWork declined to comment.
Things looked very different just a year ago. New York-based WeWork, which leases office spaces and rents them out to individuals and start-ups, was seen as a disruptor with a business model unhindered by property ownership.
It was expanding at breakneck speed, increasing revenue but also racking up steep losses, as demand for flexible office space steadily grew. Backed by Mr Son, the company commanded massive valuations as it expanded globally.
Last October, Mr Neumann struck a handshake deal with Mr Son for SoftBank to invest an additional $16bn, valuing WeWork at $35bn, according to a person with direct knowledge of the discussions inside SoftBank.
But some investors in SoftBank's $100bn private equity Vision Fund were concerned about the size of the amount, given that Mr Son had already invested more than $8bn into the start-up, the source said.
Mr Son, ranked by Forbes as Japan's second-richest person, backed down. In January, he agreed to a more modest $2bn investment in WeWork at valuations of up to $47bn.
Mr Son started to have some misgivings about WeWork this summer, as he grew concerned that the company would not be able to achieve a $47bn value in an IPO, two of the sources said.
In August, We Company's IPO filing revealed extensive and unusual ties between the start-up and Mr Neumann, including him being a landlord to the company on some properties, drawing criticism from investors.
WeWork's potential valuation in its IPO kept falling as bankers tested the market for demand.
"It was so frustrating," said the source familiar with the board's deliberations. "The company was misreading the market too optimistically."
Last week, Mr Neumann agreed to delay the IPO when it became clear that it would not even manage to raise $3bn, the minimum amount WeWork needed to fund its growth plans, according to two of the sources familiar with the situation.
For some directors it was the final straw, as they realised that the market was too focused on Mr Neumann, said the source familiar with the board's deliberations.
At the board meeting on Tuesday, Mr Neumann did not put up much of a fight, four sources familiar with the situation said.
"Since the announcement of our IPO, too much of the focus has been placed on me," Mr Neumann wrote in a memo to employees, following his decision to step aside.