On August 14th, The We Company (the company formerly known as WeWork) filed its mandatory S-1 paperwork to go public, and it’s worth reading in full. I mean, forget the serious stuff for a moment. The thing begins with an epigram: “We dedicate this to the energy of we — greater than any one of us, but inside all of us.”

The energy of we. I get it from a branding perspective — they’re literally calling themselves The We Company — but, you know, normal people would just say “our energy.” I tease Silicon Valley’s tech companies a lot, but New York easily matches them in ego. Look at these kids, literally bending the English language to their will!

Anyway, please join me on an annotated trip through my favorite parts of the mandatory filing.

Is The We Company a tech company?

WeWork — excuse me, The We Company — is primarily a landlord for freelancers and companies. You pay rent on your desk or whatever, and then you don’t have to work in the same place you live. (There are also conference rooms.) And yet the word “technology” appears 110 times in the S-1. “We provide our members with flexible access to beautiful spaces, a culture of inclusivity and the energy of an inspired community, all connected by our extensive technology infrastructure,” The We Company tells us. But I am having the damnedest time figuring out what the “extensive technology infrastructure” is. Does this just mean Wi-Fi? Is it the neon lights? Is it… lasers?

It’s true that The We Company hires lots of engineers, product designers, and so on. But, like, what major company doesn’t? If that’s the standard by which one considers a tech company, JPMorgan Chase is one of the biggest and most important tech companies on earth.

I am just going to drop The We Company’s org chart here because it honestly leaves me speechless:

The We Company, taken broadly, is interested in co-working spaces (WeWork), private schools (WeGrow), and apartments and hotels (WeLive). The We Company isn’t a tech company, though it is very successfully posing as one. It also has investments in a private club targeting women called The Wing; The We Company owns a 23 percent stake, according to these documents. Its other investments are mostly real estate. This is to say nothing of the fact that there are two ways the company makes money: 1) from people paying fees to lease its shit, and 2) from sponsorships and ticket sales for events.

The We Company’s main competitor is IWG, a real estate company that is not pretending to be a tech company, as Recode points out. “IWG has had substantially more square footage and more customers, and has actually made a profit — yet its market cap is just 8 percent of what SoftBank’s latest funding round thinks WeWork is worth,” Recode helpfully tells us. The We Company isn’t just a regular real estate company, then; it’s a real estate company that’s taken a lot of money from SoftBank and other firms by just saying “tech” a lot.

Anyway, I went further into the documents, and wow. Adam Neumann, CEO of The We Company, and Rebekah Paltrow Neumann, founding partner of The We Company and first cousin of Gwyneth, have a succession planning document that does not even consider the possibility of divorce. If anything happens to Adam, Rebekah plus two board members (in some circumstances, of her choice) get to pick the next CEO.

Now, if Rebekah can’t do this — perhaps because she is dead or disabled — a trustee acting on behalf of the Neumann estate will pick up the work of finding a new CEO. This company appears to be all about the Neumanns, especially Adam Neumann.

A major risk factor: Adam Neumann

Adam is a risk factor. Seriously, check the Risk Factors section. “Adam will have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of our directors. As a founder-led company, we believe that this voting structure aligns our interests in creating stockholder value.” Well, it creates value for Adam, anyhow.

Adam Neumann bought buildings that he then leased to WeWork, The Wall Street Journal reported in January. Adam made millions on the deals. In May, he said he would sell the properties that WeWork leases to a real estate investment unit run by WeWork and funded by outside investors, The Wall Street Journal reported.

The investment vehicle, called ARK, will manage Adam’s holdings in 10 commercial properties, the IPO form says. Four of those properties are leased by WeWork.

The S-1 form notes that Adam “currently has a line of credit of up to $500 million with UBS AG, Stamford Branch, JPMorgan Chase Bank, N.A. and Credit Suisse AG, New York Branch, of which approximately $380 million principal amount was outstanding as of July 31, 2019.” That loan is secured by some of The We Company’s shares.

Adam is also $97.4 million in the hole to JPMorgan Chase “across a variety of lending products, including mortgages secured by personal property,” though those “lending products” aren’t secured with We Company shares. Incidentally, JPMorgan Chase is one of the underwriters of The We Company IPO. (Others include Goldman Sachs, Bank of America, Citigroup, and Barclays. The IPO may be worth more than $122 million in fees, according to Bloomberg.)

While Adam hasn’t taken a salary for his We Company work — neither has Rebekah — the company issued him a $7 million loan in June 2016. (It is repaid, with interest.)

There are a few reasons to launch an IPO: a big one is to take on new investment. IPOs also let insiders cash out. Before 2019, Adam had not received any equity awards, the documents say. But as The We Company got larger, the board of directors decided to give Adam reason to do an IPO, so Adam received options to purchase more than 42 million shares.

The breakdown of the shares in Adam’s compensation package is as follows:

• 9,438,481 options vest every month for five years
• 9,438,481 options are performance-based vesting and vest monthly for five years
• 7,078,861 options will also be granted monthly “if we attain a public market capitalization of $50 billion and vest monthly for a period of years after that”
• 7,078,861 options “meet the performance-based vesting conditions if we attain a public market capitalization of $72 billion, and vest monthly over a period of two years from that date”
• 9,438,481 options “meet the performance-based vesting conditions if we attain a public market capitalization of $90 billion, and vest monthly over a period of two years from that date”

This led to the $362.1 million loan Adam got in April from The We Company to exercise his stock options. Adam repaid the loan this month by giving the shares back. “Following the settlement of this loan, the Company issued to Adam the number of profits interests equal to the number of shares surrendered by Adam in settlement of the loan.” I am not totally sure I follow this sentence, honestly, but it seems like Bloomberg’s Shira Ovide did, and here is how she describes it: “Neumann swapped out a portion of those options the company valued at more than $360 million in a complicated transaction with the company that gave him a financial instrument tied to future WeWork profits.”

Adam spread the financial love to his wider family, too. From the filing:

One of Adam’s immediate family members hosted eight events relating to our Creator Awards ceremonies in 2018, for which she was paid an aggregate of less than $200,000. Another one of Adam’s immediate family members has been employed as head of the Company’s wellness offering since 2017, and he receives less than $200,000 per year for acting in this capacity.

Also, while we’re talking Adam-related risk factors: interviews Adam gave to Business Insider and Axios possibly violated the Securities and Exchange Commission’s IPO quiet period. They’re listed in the form as risks to the business. See, The We Company filed for IPO in December; the SEC’s required quiet period starts when a company files its registration, and it ends when the SEC staff declare the statement “effective.”

In total, as Shira Ovide at Bloomberg points out, there are 10 pages’ worth of the filing that are just disclosures about Adam.

What about Rebekah?

Rebekah, Adam’s “strategic thought partner,” appears significantly less often. As I mentioned, she’s never received a salary. She also kicked up a fuss in September 2018 by making some pretty weird comments about what women are supposed to do, according to CNBC: “A big part of being a woman is to help men [like Adam] manifest their calling in life.”

This is a dim view of marriage: only one partner can “manifest their calling in life.” While The We Company walked back those comments — sort of! — by adding more context, it didn’t help because the context is: “The reality that I see today is that there is nothing bigger that women can do, in my opinion, than empower their partners — and that can be a man, a woman, a friend, it doesn’t matter, but empower others.”

At The We Company, Rebekah is the CEO of WeGrow, the school. At Cornell University, she majored in business and also studied Buddhism. Actually, I’m just going to quote her biography on WeGrow: “Rebekah has traveled the world apprenticing and studying under many Master Students, such as His Holiness the Dalai Lama and Mother Nature herself, and is committed to creating an educational community that fosters growth in humans’ minds, bodies, and souls elevating the collective consciousness of the world.”

She’s even attended the Dalai Lama’s birthday party, according to a 2016 Fast Company profile. “We don’t have a line at all between work and life,” she told Fast Company. “It’s not even a blurred line. There is no line.”

Since Rebekah is the one in charge of branding, I presume the following sentence from the S-1 is her doing: “We are a community company committed to maximum global impact. Our mission is to elevate the world’s consciousness.”

I blame SoftBank

Okay. So we know that The We Company, hilarious as it is, isn’t a tech company. So why does it have this sky-high evaluation? The answer appears 51 one times in the S-1: SoftBank.

SoftBank, its Vision Fund, and its CEO and founder Masayoshi Son, have loomed large over the tech industry, with investments in Slack, Uber, and GM Cruise. “SoftBank’s strategy has been to put enormous sums — its smallest deals are $100 million or so, its biggest are in the billions — into the most successful tech startups in a given category,” Sarah McBride, Selina Wang, and Peter Elstrom wrote in a Bloomberg profile last year.

In that article, an anonymous Silicon Valley partner calls SoftBank a “big stack bully,” which is a poker expression for someone who has so many chips that no one else will bet. (If you are reading this, anonymous source, please drop me a line. You sound fun!) The investments made by SoftBank are huge — and often push the companies SoftBank has invested in past their competition in both valuation and scale.

In January, SoftBank dropped another $2 billion into The We Company, bringing it to a valuation of $47 billion, according to The New York Times. SoftBank’s total investment in The We Company — including those made by its Vision Fund — is something like $10 billion, that report said. The Vision Fund, which raised about $100 billion, is backed by Saudi Arabia’s Public Investment Fund, Apple, and the government of Abu Dhabi, among others, according to Bloomberg.

That $2 billion might seem enormous, but it wasn’t as big as one of the deals SoftBank considered: buying out all other investors for $10 billion and then adding $6 billion more to The We Company, The Wall Street Journal reported. “Within SoftBank, the strong support for WeWork has been controversial,” wrote Eliot Brown. ”Several executives questioned the lofty valuation of a company primarily focused on real estate.”

If the company is to continue expanding at its current pace, it needs to get cash from somewhere. The IPO was filed in December 2018. In early January, several papers reported that the SoftBank cash injection was smaller than expected. And “in the first half of 2019,” the CEO got his first performance incentives, which are tied to the public market, per the documents.

An elevated consciousness of downside risk

So this company, The We Company, used to be called WeWork, but it changed its name. The new name was owned, Bloomberg’s Ellen Huet reports, by We Holdings LLC — so WeWork paid $5.9 million to acquire “we” and changed its name last month. We Holdings — you guessed it! — manages stocks and assets owned by… WeWork’s founders.

I tell you what, this has absolutely elevated my consciousness. For instance, the average initial term of The We Company’s leases is 15 years. The company will pay $47.2 billion, minimum, on the leases it’s already signed as of June 30th. And it’s still trying to grow.

I don’t know, friends. I just don’t know. I have never seen anything like this, and I cannot wait to see what the SEC has to say about loaning your founder, CEO, and controlling shareholder money while also paying him rent. This is to say nothing of who got paid by the name change or any of the rest of it. “As an investor, why would you be willing to put your confidence in this structure?” Charles Elson, a corporate governance professor at the University of Delaware, told Bloomberg.

I love chaos, and I am now very interested in The We Company. This company is heavily dependent on one guy, Adam, who seems to have a propensity for absolutely incredible deal structures. I am very excited to find out who will pony up for shares. Whee!