45
votes
Accepted
Losing equity if my work is used for a new company
It is possible that you could successfully sue the founders of C1 for failing in their fiduciary duty to C1's shareholders (you).
Presumably the major part of your loss is not from the website itself ...
- 30.3k
40
votes
Accepted
Do "normal" shares in large companies pay equity, as well as profit?
Your shares represent partial ownership of the company. You get dividends when the company transfers some of its profits to its owners.
When the company is sold, it will usually be for some ...
- 7,576
39
votes
Why would one choose to sell stock back to a company for less than their current market price?
One would sell the shares for the same reasons they are sold on the open market. Indeed, many share buybacks are performed on the open market, see how does a share buyback work
Additionally, companies ...
- 7,462
34
votes
What is this type of equity called where I get a share of the profits for the duration of my employment?
There is no equity. You don't get dividends. You can't sell it at all. Not on the stock market. Not to other investors. Not back to the company.
This is an example of profit sharing. You are getting ...
- 145k
33
votes
Accepted
Why would you let your mortgage default if you can afford to keep paying it?
'Being able to pay your mortgage for the next few months' is not the same as 'Being able to bear the weight of the outstanding debt in an uncertain future'. There is also a psychological weight to ...
- 43k
30
votes
Are stocks and bonds actually liquid?
The second quote sounds like complete nonsense to me. There is no "high cost to their owner" from converting the stocks into cash. The high cost comes from the stock losing value. That an asset can ...
- 10.4k
30
votes
Accepted
Should I buy a nicer house in a worse area for less than I budgeted?
Welcome to Money.SE.
You know, questions like this can help point out good/bad for a given choice, but there isn't likely to be a 'right' answer. I can offer a well reasoned answer, only to find ...
28
votes
Accepted
How to compute worth of my equity?
It seems like I hold only $1 because 100,000*$0.00001 = $1.
No - you have the right to buy stock at $0.00001 per share. Presumably, the stock will be worth more than that, so your "profit" will be ...
- 142k
23
votes
Accepted
What does "Home Equity" do for me?
Broadly-speaking, equity just refers to (the value of) what you own, after deducting what you owe.
The accounting equation is: Assets - Liabilities = Equity.
- investopedia
So if you have $100k ...
- 9,392
23
votes
Why would a company prevent their employees from selling their pre-IPO equity?
One reason for a Private company to restrict the number of shareholders is that is there are additional SEC reporting compliance requirements once you exceed the threshold of 2,000 shareholders / 500 ...
- 2,732
22
votes
Why would one choose to sell stock back to a company for less than their current market price?
The price was around $60/share when the buyback was announced. My wild guess is that in response to selling off the Speedway brand, they were concerned about investors dumping stock, which could send ...
- 4,476
21
votes
I can't understand what equity is
Consider something tangible: a car. You buy it for $20,000 and borrow $10,000 of that. At some point in the future, the car is worth $15,000 and you still owe $9,000. Your equity is the difference - $...
- 13.4k
20
votes
Is it possible for a company to dilute my shares to the point they are insignificant
It will depend on how the shares are set up - if your 1 share is a separate "class" than the founder's shares as defined by the articles of incorporation, then yes it could be possible. If ...
- 142k
19
votes
Losing equity if my work is used for a new company
My guess is they've been doing that "equity" deal with many of their vendors. So the C1 to C2 trick looks an awful lot like an attempt to defraud the creditors. I think courts may be likely ...
17
votes
How to structure equity buyout?
The bottom line is that whatever you two agree on is fair. Having said that, if the company is worth 1 million your equity is 45K, 3 million 135K.
Offering you $4,500 is ridiculous and you may want ...
- 79.6k
15
votes
Should I buy a nicer house in a worse area for less than I budgeted?
Leading up to the last big housing dip, many people borrowed near their limit planning on increased home values to provide them with equity, many of them were stuck in a bad spot when home values ...
- 71.2k
15
votes
Why would you let your mortgage default if you can afford to keep paying it?
Let's say your house used to be worth 400k and you had a mortgage for that amount. A 100% mortgage would be considered crazy and/or not be available a lot, or most, of the time but during the bubble ...
- 1,069
14
votes
Accepted
Are stocks and bonds actually liquid?
From your second Investopedia link:
For a consumer, a lack of liquidity can mean borrowing at a high rate of interest, selling a possession at a probable loss, or failing to pay the bills on time.
...
- 77k
13
votes
How to structure equity buyout?
It isn't possible to give advice on your specific situation without actually knowing the value of your current equity. Get a lawyer to represent you and give specific advice, including possibly hiring ...
- 43k
13
votes
Options for building equity while living with parent?
My first thought -
Cash is also "equity". You don't say how much you're contributing to the loan on your MIL's house, but one way to built "equity" would be to save as much cash as ...
- 142k
12
votes
What does "Home Equity" do for me?
Do I understand the benefits of home equity correctly?
Sort of - equity is essentially the value of the home minus what you owe on it. So if you make a mortgage payment that pays off the principal by ...
- 142k
12
votes
Why would you let your mortgage default if you can afford to keep paying it?
What benefit would the bank receive by foreclosing on someone who had the ability to pay their mortgage?
There would only be a benefit if the homeowner is refusing to make payments. By foreclosing, ...
- 30.3k
12
votes
Are there any amortized home mortgage loans where the monthly payments are distributed equally between interest and principal?
Such a product does not exist. And it would be pretty unlikely that you'd be able to get such a thing past a regulator and ensure that you as a lender actually make money.
Let's work through the ...
- 28.3k
11
votes
Why would a company prevent their employees from selling their pre-IPO equity?
Typical IPOs tend to have a lock-up period which prevents insiders (founders, employees, venture capitalists) from selling their shares for some amount of time after the IPO. The waiting period tends ...
- 77k
10
votes
Sell a domain name with equity contracts?
Is it an unattractive offer many buyers would shy away from?
Buyer who have specific plan may skip getting into such deals as this would be an hindrance to resell the business. Others who are not ...
- 57.2k
10
votes
How to structure equity buyout?
There's a very simple solution to this. You own 4.5% of a company whose valuation is difficult to determine. Were it simple to determine, it would be obvious that you would be entitled to 4.5% of that ...
- 10.4k
10
votes
I can't understand what equity is
Kate explains the first question well, but I think there's something to add for the second:
People buy stocks not just for the current equity value (assets - liabilities), but for a share of future ...
- 142k
9
votes
Accepted
I am a co-founder departing from a startup with debt, should I cover a portion of the debt on exit?
You are responsible for 0 of the debt. If the partners try to force a liquidation, they are liable to damages TO YOU.
The company has a value. As you said:
Due to favourable cashflow with our ...
- 11.6k
9
votes
How to compute worth of my equity?
Cliff period is defined as that period until you vest any options. So if your employment is ended at 2 months 29 days, then you would have zero vested options. Waiting one more day gives you 8.33% ...
- 79.6k
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