Questions tagged [equity]

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1answer
30 views

Accelerated Incentive Units or Profit Shares' pros and cons

I'm new to fundamentals of stock/equity. I have got an offer from an LLC company and the recruiter is saying they will allocate me Accelerated Incentive Units(AIU) which is intended to be treated as ...
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6answers
3k views

Options for building equity while living with parent?

My wife and I recently moved to an expensive area of the US for her job, the school district and other reasons. We are currently living with my wife's mother, in her house. After a recent divorce she ...
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3answers
197 views

Equity split between join home owners [duplicate]

My sister & I bought a home 50/50 We are on the deed jointly, and we have no written agreement other than the closing documents. She paid for her half of the mortgage for 2 years, then paid ...
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1answer
79 views

Does it often make sense to sell an equity while it still is a short-term loss?

Let's imagine Juanita. Juanita pays taxes in the USA. Juanita bought equity XYZ on January 1 and sold it for a profit of $100 a month later. Thus, it was short-term gain. Juanita also bought equity ...
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0answers
28 views

Need of Equity share capital if one has sufficient reserves and surplus?

New to stock market correct me if i'm wrong. Reliance Industries balance sheet According to my understanding reserves and surplus keep account for profit that a company makes and this money is ...
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1answer
99 views

Should a person sell all/some/none of the stock they receive when their former employer goes public

Consider a person with the following financial situation: An annual income in the 150-250 thousand $/year range Savings in the 250-750 thousand $ range (invested in Vanguard ETFs, for example) A ...
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3answers
5k views

Why would one choose to sell stock back to a company for less than their current market price?

Marathon Petroleum Corporation (MPC) is currently offering to buy back $4 billion USD of their stock (reference). The minimum they will pay is $56, and the maximum is $63. Given that this equity is ...
4
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2answers
270 views

How are assets stripped before bankruptcy? [closed]

This New Yorker article says ...hedge funds and private equity have used leveraged buyouts to purchase chains like Sears and Toys R Us, and then stripped their assets, including real estate, en route ...
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1answer
46 views

Investment with Valuation and Credit Line with 10% Equity

Before I ask my question, I would like to tell that I am not from a Business background and therefore this might sound like a stupid question to most. Recently, I watched a film based on Steve Jobs ...
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3answers
120 views

How do SPAC targets (acquired companies) benefit from additional cash upon merging with a SPAC?

Hope this is the right place for the question. There are many articles on SPACs explaining how things work, so I'll cut straight to the question: I have read and heard people say that a SPAC deal can ...
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0answers
23 views

If the founders and investors all own SAFE notes, how bad is that for common stock option holders?

I'm interested in joining a startup from San Francisco for a modest pay in exchange for 0.75% of equity (stock options). There has been one round valuing the company at $22 million. The serial ...
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2answers
36 views

How company total asset increased while net revenue and EPS is negative

How company total asset increased while net revenue and EPS is negative? I looked at one company, and its yearly total asset is increasing year by year. However, its net revenue and EPS still negative....
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0answers
63 views

Doubt Regarding Equity Beta and Asset Beta

I know regarding levered beta (equity beta) and how to convert into unlevered beta (asset beta). But recently my finance professor in one of his slides showed the below formula : asset beta = (D/D+E)*...
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1answer
178 views

Why do startups prefer Stock Options over Stock Grants?

Why do startup companies and large companies alike seem to always prefer to offer their employees stock options, rather than stock grants? Stock grants seem like a way better deal for employees. Let ...
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6answers
2k views

How to structure equity buyout?

Years ago, I helped out a friend on his startup as a software engineer. Spent ~500-600 hours on it, was compensated a little under half my hourly rate + 4.5% equity in the company, because the company ...
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1answer
87 views

How to get UK company share certificates when an entrepreneur does not comply?

In January 2020, I made an investment of £7,500 being promised that I would receive the respective share certificates related to UK company. After that, the pandemic became the excuse but the ...
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2answers
310 views

In the context of corporate profits, what does "back-half" mean?

Today, the following was reported: Clorox shares are trading lower after the company reported Q2 results. While the company beat estimates, it said it expects back-half sales to be about flat. What ...
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3answers
153 views

How do I calculate the equity I have in my home when overpaying on mortgage?

I am aware that when paying off a repayment mortgage the proportion of monthly payments going towards the interest is higher towards the start and eventually the proportion lowers towards the end of ...
1
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1answer
114 views

Assets != Equity + Liabilities

could anyone explain to me, in this balance sheet, which items are assets, which items are liability, and which items are equity? Are funding debt and Notes issued liability? Is redeemable convertible ...
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1answer
60 views

How equity works - is there a difference between rescaling equity and fixed-equity?

after a colleague of mine left the company, I'd like to provide him/er with an equity for the work done. I'd like this equity to be dynamic, meaning that whenever a new member or investor enters, his/...
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2answers
138 views

To the employer, is equity more or less expensive than payroll?

I work for a company that compensates employees with low base salary and a bit higher than average equity. My question is, how much more expensive is paying an employee equity vs standard salary? How ...
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0answers
39 views

Equity Crowdfunding payoff

I have invested in several companies so far through equity crowdfunding rules (on sites like seedinvest and wefunder), but I'm still not totally clear on how future equity might be allocated. Does ...
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2answers
53 views

What to ask for to determine percent of startup I have shares in?

I work at a pre-launch tech startup and we agreed that I'd receive 2% equity. When I signed paperwork for the shares, there was nothing indicating what % I signed at, just the number of shares. I ...
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7answers
4k views

Why would a company prevent their employees from selling their pre-IPO equity?

I have heard and read that some non-publicly traded companies prevent their employees from selling their pre-IPO equity. Why would they have such a policy? For example, from How to Sell Private ...
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4answers
257 views

How to reinvest my gains in the equity?

My equity portfolio has been gaining a bit of traction because the economy is recovering. I am a noob investor and It has only been a few months since I first started. The rule of thumb for most ...
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2answers
207 views

What does equity mean for me in practical terms in a job offer?

I am looking at a job offer and they are offering me the following equity package: Equity: 14,000 stock options Equity Breakdown: All equity goes on a 4 year vesting schedule, with a 1 year cliff. ...
3
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3answers
864 views

Why would voting Class A Google stock (GOOGL) be selling for less than non-voting Class C stock (GOOG)?

Currently (2020 October 30), Class A Google stock (GOOGL), which has voting rights, is selling for less than its non-voting Class C stock (GOOG). This seems backwards. Why would this ever be the case?
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0answers
352 views

Were the shareholders of ZTNO (Zoom Technologies Inc.) just hustled?

According to most financial sites, shares of Zoom Technologies Inc. (ZTNO) just suddenly went to zero. Before anyone panics, I'm not referring to Zoom Video Communications Inc. (ZM), the maker of the ...
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1answer
55 views

Making equity investment of personal money to LLC

NY state here. I have a very small single member, member managed (I'm the member) LLC that has elected to be taxed as an S-corporation (this might be important). The LLC is running a little light on ...
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1answer
53 views

liquidation preference and other loop holes when joining startups who offer equity

There are lots of startups that want to provide equity in exchange for labor rather than a salary or a combination of both. Reading online it seems there are a ton of loopholes where I may not get ...
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1answer
499 views

Difference between Stockholders' Equity and Stockholders' Equity-Parent?

What's the difference between "Stockholders' Equity" and "Stockholders' Equity - Parent"? Which should I use in calculating the return on equity?
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1answer
32 views

NASDAQ Equity Option settlement

Suppose in NASDAQ i sell APPL equity put option of week and that option became ITM then would this option will settle in cash or physical delivery of stock?
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1answer
195 views

Why do startups dilute their equity?

I am trying to understand why, when a startup raises funds, it dilutes its equity by issuing more shares, rather than just issuing a portion of the existing shares. For example, let's say a startup ...
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0answers
69 views

How does a stock trade at an exchange that isn’t where it is listed? [duplicate]

For example, AAPL is listed on NASDAQ but I see that NYSE has some trading volume for that symbol. Does NYSE just act as the matching engine, fill the orders, and then report the trades to the listing ...
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9answers
8k views

Should I buy a nicer house in a worse area for less than I budgeted?

I am a single male in my mid twenties, based in the UK and looking to buy my first home. I see this home as a 'stepping stone' home and intend to live in it for 5-15 years until I get a partner and ...
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0answers
53 views

Seeking Equity Split Advice between four co-founders, two of them who have invested money and two who haven't

Founder A,B,C,D are equally responsible for the execution and the idea. At the pre-development stage, Founder A invests $12,500 and Founder B invests $7,500, whereas Founder C and D aren't investing ...
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1answer
74 views

Startup Expirable Equity

I own a startup that is user-based. We are close to finishing the building of the prototype so therefore it has no users, no revenues, nor any investment. I have 4 unpaid co-op students working full-...
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1answer
41 views

NPS Tier-1 Account

If the present fund value is less than the total invested amount in NPS-Tier 1 account and we change the scheme preference(I mean change the % allocation in Scheme E,G,C) then do we have to book ...
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2answers
66 views

Diluting Shares vs Reserving Shares

I often read about a startup company diluting its shares, in order to provide additional shares for an investor during an investment round. This means that the ownership % for the co-founders is ...
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2answers
107 views

How to find total equity from balance sheet of a company?

I was looking for balance sheet of a company to know about it's total assets, liabilities and equity price. I tried apply basic formula to get equity, which is 'Assets = Liabilities + Equity'. But, ...
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0answers
42 views

Mutual Funds Investment advice needed for beginner

I am planning to start investing in mutual funds now. I am a beginner and young(28). I plan on doing investments as a lump sum and SIP. I plan to invest 5 lakhs via lump sum now and SIP of 20k per ...
2
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1answer
46 views

What category is the following: Naked call or covered write

I would like to do the following: Just before market close on a Monday, buy 100 shares of X and simultaneously sell 1 X call option deep ITM. I have sufficient funds in my account to buy 100 shares ...
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3answers
158 views

How does equity work if you use equity to for a down payment on a second house?

If home equity is used as a down payment on a second home, how much initial equity does the second home have? is it equal to the equity-down-payment as in a cash down payment for a home? Say you have ...
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0answers
103 views

How to calculate the share price after stock dilution, when the company is being taken over?

Currently, YES BANK might be taken over by SBI, and RBI has announced that SBI will get 49% equity at no less than 10 rs per share. YES BANK shares are currently trading at 16.60. There are currently ...
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2answers
5k views

Do "normal" shares in large companies pay equity, as well as profit?

If I buy shares in a big company like Intel or Microsoft I (can) receive a dividend. So these shares (can) pay "profit". However, if the company is bought, do i also receive a split of the "equity"/...
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1answer
83 views

Why does private equity have a higher fee structure than public markets?

I'm trying to understand why private equity tends to have higher fee structures than public markets. My hunch is that it takes more skill/risk to manage illiquid assets. I'd also imagine more due ...
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0answers
95 views

Equity cannot be redeemed at the option of the holder

I was going through Tier 1 Capital on Investopedia. I came across this note a couple of times in the article. Equity capital is inclusive of instruments that cannot be redeemed at the option of the ...
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2answers
201 views

How can I estimate the outstanding shares of my private employer?

When I joined the startup I currently work for, I was offered a number of shares as part of my compensation. Unfortunately, I've been given no indication as to what they're actually worth with respect ...
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2answers
133 views

Dilution of investment; how does it happen?

I sometimes hear my investing friends talking about their investments being diluted down, but I've never had the courage to have one of them explain it to me. From my perspective, if you buy 20% of ...