Re:Silicon Valley’s ‘unicorns’ have regulators worried
by Animats on Saturday April 02, 2016 @10:51PM
(#11414691)
I suspect when the chips are down, the courts will rule that Google can't just burn a pile of value because "we like Science" or some such thing.
That's when stockholders file lawsuits alleging violation of director fiduciary responsibility. This can happen with a startup if the management proposes a funding round that's a significant lose for existing shareholders. The directors have the obligation to act in the best interest of the stockholders, not the management.
It also comes up when a company has assets and is losing money, and the stockholders want to liquidate and get some money out, while management wants to burn all the cash out to the bitter end.
That's when stockholders file lawsuits alleging violation of director fiduciary responsibility. This can happen with a startup if the management proposes a funding round that's a significant lose for existing shareholders. The directors have the obligation to act in the best interest of the stockholders, not the management.
It also comes up when a company has assets and is losing money, and the stockholders want to liquidate and get some money out, while management wants to burn all the cash out to the bitter end.