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Let's say if you brought 2000 share of a company at 20$ and the value goes down to 10$ and now the company decided to pay shareholders 13$ to take the companies private.

Is it reasonable not to sell your share for that particular price? and if it is not possible and holder forced to take a loss then what happens?

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    Why wouldn't you sell it? A 35% loss is substantially less bad than a 100% loss. – RonJohn Jul 22 at 13:33
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    “The company” doesn’t do anything like that - shareholders are the company and decides what to do with it. Another company (shareholder or group of shareholders) might do it, which is most likely what is happening. That being said, in many countries legislation is so that a shareholder owning more than 90% of stocks can force the remaining <10% to sell their shares. – ssn Jul 22 at 14:33
  • You ask if a particular course of action is "reasonable"; can you give an example of what you think might motivate a "reasonable" action? For example, "I believe I can get a better price later" is a reason to take an action. Can you give a similar example of what sorts of reasons you have in mind? – Eric Lippert Jul 22 at 22:37
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This depends on the exact local legislation.

What you paid for the shares (price) typically has absolutely no influence. Price is what you pay for, value is what you get. The present fair value of the company is $10, and you are getting a profit of $3 over the fair value (although a loss of $7 considering what you paid for). I'd say this is pretty ok deal: compensation is 30% over the fair value.

However, you may have the option of refusing to sell. What happens might depend on the local legislation, but I assume if enough many people decide to sell and the buyers have obtained 90%, 95% or similar amount of outstanding shares, they are forced by the legislation to buy the rest.

Also, consider of the possibility that the company vanishes from stock exchange lists, so that you can no longer sell your shares should you want to.

So, all I'm saying is that you should consider taking the offer. I would. You will find from the stock market some pretty decent deals, other companies, for the money you receive from the sale of the stocks.

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When there's a tender offer to take the company private, you can reject it. Unless you own a substantial block of shares, you will have no influence on management.

Because they are offering a premium over current price, it's likely that a majority of shares will be tendered, resulting in a thin market with low liquidity. That may lead to difficulty in selling your stock at a later date, perhaps even at a lower price since there may be little to no trading in it.

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