Pre-IPO company stocks have any value? (CA)

[BluuSkie]

considering that the company is a startup Pre-IPO -

1. if an employee is laid-off, does that person get to keep their stocks?
2. will the employees get anything for the stocks if the company closes down?
3. and what happens if a large corporation acquires our company. will we get anything for our stocks?

 

[ALawyer]

Okay -- do you have shares, or options? If shares are there any agreements with respect to them? (Sometimes you have to agree to sell them back.) If options, are they fully or partially vested and thus subject to exercise? If so how many and at what price and for how long? Is the exercise price equal to the fair market value, or is the price a pre-bubble unrealistically high one?

 

[BluuSkie]

RE:

they are all stocks, not options.

 

[ALawyer]

As you own shares, they can't take them back UNLESS there is an agreement giving them rights to a buyback.

IF the company winds down, it is likely the stock will not be worth much. Even companies like Garden.com and Pets.com and WebVan.com that went IPO and are PUBLIC have shares trading in the pennies. (I have some stock where the brokerage commission to sell would exceed the amount I'd realize from the sale.)

 

[BluuSkie]

even if the stocks trade in for pennies, it would still amount to something rather than nothing at all. 5 cents times several thousand shares, hmmmmm.......

thanks, ALawyer for your help =)