undefined | Better HN

0 pointspylua2y ago0 comments

> did not win or lose anything

Is this true? Would there not be dilution?

0 comments

Kluggy2y ago

There absolutely will be

mgiannopoulos2y ago

Since the stock went up 10x during the timeframe of the deal, the shareholders benefited a lot.

Kluggy2y ago

Some shareholder benefited a lot. Some bought at the top and have only had negative returns. Some have a net zero cause the bought at this point on the way up.

Just because some people have astronomical returns doesn't mean everyone received the same.

2 more replies

seydor2y ago

How would there be dilution? He got stock options

seydor2y ago

he s a shareholder too, no? net should be zero

rhelz2y ago

An example with smaller numbers: Suppose a company is worth $10 and has 10 shares. The board issues 10 more shares to one person.

Sure, the company would still be worth $10. But there are now 20 shares outstanding. Everybody except the guy who got 10 shares would see their shares fall in value from $1 to 50 cents.

Basically, issuing stock to one person has the effect, mutatis mutants, of transferring wealth from all the other shareholders to the person who got the new stock.

seydor2y ago

Still the total value the shareholders hold is the same so they have have not been damaged as a group, which is alleged here. The damage is psychological, i.e. most of them are jealous of one of them

2 more replies

j / k navigate · click thread line to collapse

0 comments

Kluggy2y ago

There absolutely will be

mgiannopoulos2y ago

Since the stock went up 10x during the timeframe of the deal, the shareholders benefited a lot.

Kluggy2y ago

Some shareholder benefited a lot. Some bought at the top and have only had negative returns. Some have a net zero cause the bought at this point on the way up.

Just because some people have astronomical returns doesn't mean everyone received the same.

2 more replies

seydor2y ago

How would there be dilution? He got stock options

seydor2y ago

he s a shareholder too, no? net should be zero

rhelz2y ago

An example with smaller numbers: Suppose a company is worth $10 and has 10 shares. The board issues 10 more shares to one person.

Sure, the company would still be worth $10. But there are now 20 shares outstanding. Everybody except the guy who got 10 shares would see their shares fall in value from $1 to 50 cents.

Basically, issuing stock to one person has the effect, mutatis mutants, of transferring wealth from all the other shareholders to the person who got the new stock.

seydor2y ago

Still the total value the shareholders hold is the same so they have have not been damaged as a group, which is alleged here. The damage is psychological, i.e. most of them are jealous of one of them

2 more replies

j / k navigate · click thread line to collapse