Wednesday, February 7, 2024

"Adam Neumann is trying to buy WeWork, but Third Point says financing not committed" + "Billy McFarland Is Selling Fyre Festival Tickets Again"

 From CNBC, February 6

  • Billionaire Adam Neumann is trying to buy back bankrupt real estate company WeWork, which he founded in 2010 and was ousted from in 2019.
  • Neumann’s counsel said it had the support of Dan Loeb’s Third Point, but the hedge fund told CNBC that it had not committed financing and discussions were only “preliminary.”
  • Neumann’s letter, first obtained by DealBook, suggests months of engagement with the company.

Adam Neumann wants to buy real estate company WeWork, the company he co-founded in 2010 that ousted him nine years later, out of bankruptcy citing the support of “well-known capital sources” including Dan Loeb’s Third Point. But the hedge fund told CNBC that it had not committed any financing and that discussions with Neumann were “preliminary.”

DealBook first reported news of Neumann’s bid on Tuesday, citing a letter sent by Neumann’s counsel.

“Third Point has had only preliminary conversations with Flow and Adam Neumann about their ideas for WeWork, and has not made a commitment to participate in any transaction,” the hedge fund told CNBC.

Neumann and his startup Flow had “consistently expressed” a “sincere interest” since December 2023 to buy WeWork

and its leases out of bankruptcy or provide debtor-in-possession, or DIP, financing, according to a letter obtained by DealBook from Neumann’s counsel, Alex Spiro.

“WeWork is an extraordinary company. As such, we receive expressions of interest from external parties on a regular basis. We and our advisors always review those approaches with a view to acting in the best interests of the company,” a WeWork spokesperson told CNBC....

....MORE

And probably more interesting, from /Spy, January 22:

Billy McFarland Is Selling Fyre Festival Tickets Again. Who Is Buying?
An evening on McFarland's comeback tour.

Billy McFarland has been called a lot of things in the six-plus years since he was arrested and charged with wire fraud for his role in the infamous FYRE Festival: Con man. Scam Artist. Fraudster. Liar. 

“Legend!”

That last label was flung at him across a barn positioned near a small runway in upstate New York on a brisk day in November. The admirer was one of 60 guests, mostly white, instagram notorious, and wearing some combination of Prada and Louis Vuitton, who were on hand for what seemed to be the kick off of Billy’s comeback tour. There were the rappers Capella Grey and Bobby Schmurda, the reality TV star Joey Joy and luxury car influencer Ethan Duran. They passed handles of vodka. According to the FYRE website, the event had been priced at $1000-a-head and sold out. 

Legends are in the eye of the beholder, but McFarland, in his black fleece pullover, dark gray slim-cut jeans, white AirMaxes, and ingratiating smile, looked pleased. He herded people, eight at a time, toward a small aircraft for a “Zero Gravity” experience. Each group ascended to a certain height, at which point the aircraft’s pilot turned off the engines. Selfies were taken in freefall before the engines choked back to life and another climb began. Another parabolic arc.

The event had been branded by McFarland as a “Survival Training,” one of a handful that would take place before FYRE Festival II, which is ostensibly scheduled for December 2024 at an as yet unnamed location in the Caribbean. But the event seemed, more than anything, like a demonstration of Billy’s personal physics. Everything that goes up is content. Everything that goes down is also content. He had a team of videographers on hand to capture B-roll for a social media hype video. The event existed simultaneously as an experience for those present and as evidence, not of a crime but of McFarland’s ability to conjure cultural moments.

On the ground, in the shadow of the excitement, hip-hop thumped from a DJ booth inside the barn. It was like a mini-FYRE Festival if FYRE Festival had ever actually happened. 

The most generous reading of the FYRE Festival story might be that McFarland was guilty of overpromising and under delivering. There were all those photos of Bella Hadid and Kendall Jenner frolicking on the beach. There were the promised performances from Blink 182 and Migos. There were the descriptions of lavish living quarters and meals.

Then, at the end of the day, there were the Storm-soaked FEMA tents and cheese sandwiches. There was no Bella Hadid, no Kendall Jenner – not a single Migo.

The legal reading of the FYRE Festival story is more straightforward. McFarland was found guilty of one count of wire fraud for defrauding investors, one count of wire fraud for scheming to defraud a ticket vendor, one count of wire fraud for a sham ticket scheme, one count of bank fraud for writing a check with the name and account number of one of his employees, and one count of making false statements to a federal law enforcement. On October 11, 2018, he was sentenced to six years in federal prison. He served almost four years and spent 10 months in solitary confinement, first for possession of a flash drive and then for participating in a podcast about his failed festival .McFarland was released from prison in March 2022 after former President Donald Trump’s First Step Act made some nonviolent offenders eligible for early release. He remained under house arrest until September 2022. 

Now a free man, he remains financially shackled. McFarland owes $26 million in restitution to his victims. Getting his hands on that kind of money isn’t going to be easy. But he does have one advantage: Attention. McFarland fascinates people.

This August, he announced that the first 100 tickets to FYRE Festival II, which he dreamt up in solitary and, listed at $499 each, had sold out. McFarland says he is leaving the festival planning to experts, but he remains the face of FYRE and the flawed hero of the FYRE story, which is, the way he tells it, all about realizing a dream.

He tells the story well. McFarland is surprisingly approachable. After the zero gravity flights, he and I spoke. He seemed relieved and excited. The event was going off without a hitch. Holding a bottle of Corona, as he was often seen while planning the first FYRE Festival, he told me the event was attended by mostly FYRE Festival II ticket holders. 

As Billy rounded up more groups for the flights, I went to ask those ticket holders why they would trust our friendly host with their money.  ...

....MUCH MORE

We've been following WeWork and Fyre Festival for many, many years.

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