I have been involved in M&A activity, and when we (owners) bought a failed competitor for clients and assets, we wiped out the owners (who had misstated some financial factors of importance) and made the employees whole (who had all been stiffed on pay). We didn’t have to, but it was the right thing to do.

Everyone has different morals and ethics I suppose.

Totally different situation. You can't think of this "getting screwed" as employees qua employees getting screwed. These are common stock holders getting screwed while creditors are made whole and preferred shareholders recoup some of their investment.

Employees who had been stiffed on pay are effectively the first priority creditors. Common stock is last.

But if you're the guy doing M&A at Amazon how do you sell that to your boss, who has to sell it to Bezos, who at the end of the day has to sell it to stakeholders.

Good PR is cheap and people talk.

I am so confused, were the owners just idiots about judging the value of the sale?

There is no reason that all the stockholders should have voted to approve this sale unless they were going to walk away with something to pad their pockets so... did some majority shareholder sell out to amazon and get some separate remuneration? I feel like that should definitely be illegal.

Edit: Oh, so the founders assumed they'd be acqui-hired and got screwed over after screwing over all the regular employees. Okay I'm totally fine with that.

Man, I sure wish someone would screw me over with a high-six-figure cash bonus like they did those founders.

Being poor is having no idea what that reality might seem like.

No, the company was failing and the board decided that this was the best way for the investors to recuperate some of their lost capital. If they waiting longer they would've had to sell for less or go bankrupt which would have lost everyone even more money. (Obviously employees were already at $0 so they couldn't lose more).

As someone else already noted in this thread: employees were the only ones who actually made money on this company, in form of their salary received over the years. It's only the equity part of their compensation that went to $0.