The once-trendy, San Francisco-born coffeeshop chain Philz Coffee has struck a deal to be sold off to a private equity firm for $145 million, but any employees who bought stock are getting the shaft, as they won’t see a penny of that money.
I tried researching this a bit, and from what I understand, the company basically has no money, which in turn makes the stock worthless. So since the stock is effectively $0.00 per share, they can just “cancel” the stock completely.
This could be oversimplified or dead wrong, but I don’t understand any other way this could work legally.
I tried researching this a bit, and from what I understand, the company basically has no money, which in turn makes the stock worthless. So since the stock is effectively $0.00 per share, they can just “cancel” the stock completely.
This could be oversimplified or dead wrong, but I don’t understand any other way this could work legally.
I think that’s how it’s been justified but the company just sold so it’s not worthless anymore right? Can’t have it both ways.
That’s exactly correct. The only caveat is if it’s paying off debt but it sounds like a good old fashioned screwing.