Re:When a Unicorn Startup Stumbles, Its Employees Get Hurt
by tvladeck on Wednesday December 23, 2015 @11:47AM
(#10784152)
> The common stock holders' interests were poorly represented in the price negotiation.
You're mistaken here. Your point rests on there being a possibility that Blackberry paid the same amount for the company (the valuation), but common stock holders got more (the waterfall). This was not possible.
Re:When a Unicorn Startup Stumbles, Its Employees Get Hurt
by jameshart on Wednesday December 23, 2015 @01:22PM
(#10784723)
But the people negotiating the deal with Blackberry knew how the waterfall would shake out. They elected to agree to a price where the share of the purchase price distributed across common stockholders left many employees in a bad place. That was a choice. As was structuring the ownership of the company, and the compensation offers to their employees, in that way in the first place.
Re:When a Unicorn Startup Stumbles, Its Employees Get Hurt
by tvladeck on Wednesday December 23, 2015 @02:17PM
(#10785046)
Right, but we have to assume that Good could not have gotten a better price from Blackberry. The alternative was even worse from the common shareholders - a price of $0 for their shares.
They also could not have changed the waterfall. So I'm not sure what your point is, really
Sure, employees share some responsibility for accepting compensation that includes stock which can be sold on your behalf without your having any say in the price you're willing to take... but companies choose to offer comp packages which include that kind of stock precisely because it's hard for employees to value, and it's easy for employees to overvalue.