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That's a very investor-friendly title. Effectively, they are taking the company private again using a legal method where investors lose the difference in stock

That's a very investor-friendly title. Effectively, they are taking the company private again using a legal method where investors lose the difference in stock value. It's not nice, but also not illegal. And these people were never known for their friendliness, so no investor should be surprised that they're taking the unfriendly route now.

rahimnathwani 6y ago
"where investors lose the difference in stock value" According to the article, the investors have the right but NOT the obligation to sell their shares at the tender price. They might trust the company's governance less after de-listing, but it doesn't appear they're being forced to sell.
- gundmc 6y ago
  What are the implications of owning shares in a company that is no longer publicly traded? Apologies if this is discussed in the article, it's partially behind a paywall.
  - elcomet 6y ago
    Maybe dividends?
  - tus88 6y ago
    Just because something is private does not mean it cannot be owned, in whole or in part.
    - function_seven 6y ago
      Ok, but what are the implications of that? If I own 0.001% of a private company—having decided to opt out during this process—am I at the mercy of that company in the future to determine how much they're willing to buy me out for? How hard would it be to locate another 3rd party to buy my share? There's no longer an exchange to trade it on, and there might be all sorts of additional rules about how and who I can sell to. Those are the questions each investor is asking themselves, and I assume that even with the large discount they're being offered, it's probably the better choice unless you hold a significant minority stake.
      - rbrtdrmpc- 6y ago
        I’m pretty sure you can’t do much with those if you are not a major shareholder or you gather under a third company that acts on behalf of you and your (enough) peers
      - rbanffy 6y ago
        The majority shareholder can also invest in the company and dilute your shares if you don't match the investment.
      - tus88 6y ago
        Depends on agreements. Sometimes other owners can veto sale of private shares. But you can sue them to force a sale on reasonable terms to the existing owners in that case. Whether that is worth the hassle for a fraction of a percentage is unlikely.
  - shoo 6y ago
    > partially behind a paywall. if you search for the title from the desktop version of Google it's possible to read the cached version
    - boogies 6y ago
      Or just stop allowing JavaScript.
  - gumby 6y ago
    You’ll have no control, will probably find it difficult to sell your shares at any price, and while you’re entitled to any dividends, the controlling entities (Sam wer brothers) can take cash out in different ways and never declare a dividend.
  - pas 6y ago
    The same as with any other (private) company. You have to deal with the majority shareholders and the board/management. It's not like you have any more control if the company happens to be public anyway. Also, big companies, private or not, in most countries have to retain an accounting auditor. Also, if you are a member of the company (as in you have equity) the management has a fiduciary duty toward you. (yes, yes, sure, in practice that means very little, they can siphon off the money in many creative ways), but usually people who are already minority owners have some trust in the majority owners. In some jurisdictions there are rules about what kind of mechanisms are available for the minority shareholders, and usually the get a board seat, and so they can kind of try to audit the majority. And in the end they can still sue, or threaten to sue, or whatever. That usually doesn't help with the valuation, and since the majority has more to lose, they can usually work out some minimally satisfactory deal between themselves. Aaaaand if not, we can finally get the popcorn, because then usually it gets dirty and juicy.
    - paxys 6y ago
      Practically speaking the biggest difference is that it is a lot harder to sell the shares to someone else.
      - pas 6y ago
        Yes, indeed, the whole point of being listed is that there's always liquidity (at least a market maker) and so a price signal. And in theory you can set your own risk limits. (Of course if trading is halted for the stock because a sudden drop/jump, that's a different story.) However, investing is always a story about managing risks (so expectations). Public or private, even if it's itself an investment company, it's still just one very fragile basket. And usually there's always someone who has so different risk/expectation profile that they'll take the other end of the transaction. Anyone holding "ETR RKET" has some strange/complex ideas.
  - jariel 6y ago
    Someone should confirm, but 'de listing' is not technically the same thing as 'going private'. 'Not on the exchange' means you don't have to follow exchange rules, but if you meet certain criteria, you're still a 'public company' and therefore subject to the same public disclosure filings etc.. Usually that has something to do with the number of shareholders, in which case, if many do actually 'hold out' it may still be de-facto a public company. Another way of saying: 'you can't just go private because you have 50%'. But it's also Germany/Lux/EU so it's different 'over there'.
jansan 6y ago
> And these people were never known for their friendliness They were the founders of Jamba, a notorious company specialized in selling ringtone subscriptions for 3 to 5 Euro per month (called "Jamba Sparabo"). This may have well been the most hated company in Germany in the early 2000s.
- rbrtdrmpc- 6y ago
  They were hated everywhere, In Italy the damn frog ringtone became associated with shitty annoying people
  - pantalaimon 6y ago
    It was this one, right? https://youtu.be/l_bTTUihfx0 https://youtu.be/l_bTTUihfx0
shoo 6y ago
> Rather than using external capital to buy investors out at a premium, the usual way to take a firm private, Mr Samwer has used company cash to buy back €223m ($260m) of its own shares. This pushed his clan’s stake to over 50%. He plans to use another €1bn of Rocket’s cash to buy out minority shareholders at €18.57 a share, the volume-weighted average price in the past six months but down from the ipo price of €42.50. > Investors are under no obligation to sell their shares, of course. But those who stay put will have little power to affect the course of the firm now that the Samwer brothers control the board with their majority stake. Rocket has stated it will be “better positioned” for long-term development if not listed on a stock exchange. It seems like the main tipping point is one group (the Sameer "clan") getting into a control position. Presumably enough other investors agreed to the earlier buybacks that allowed that to happen.

rahimnathwani 6y ago

"where investors lose the difference in stock value" According to the article, the investors have the right but NOT the obligation to sell their shares at the tender price. They might trust the company's governance less after de-listing, but it doesn't appear they're being forced to sell.

gundmc 6y ago
What are the implications of owning shares in a company that is no longer publicly traded? Apologies if this is discussed in the article, it's partially behind a paywall.
- elcomet 6y ago
  Maybe dividends?
- tus88 6y ago
  Just because something is private does not mean it cannot be owned, in whole or in part.
  - function_seven 6y ago
    Ok, but what are the implications of that? If I own 0.001% of a private company—having decided to opt out during this process—am I at the mercy of that company in the future to determine how much they're willing to buy me out for? How hard would it be to locate another 3rd party to buy my share? There's no longer an exchange to trade it on, and there might be all sorts of additional rules about how and who I can sell to. Those are the questions each investor is asking themselves, and I assume that even with the large discount they're being offered, it's probably the better choice unless you hold a significant minority stake.
    - rbrtdrmpc- 6y ago
      I’m pretty sure you can’t do much with those if you are not a major shareholder or you gather under a third company that acts on behalf of you and your (enough) peers
    - rbanffy 6y ago
      The majority shareholder can also invest in the company and dilute your shares if you don't match the investment.
    - tus88 6y ago
      Depends on agreements. Sometimes other owners can veto sale of private shares. But you can sue them to force a sale on reasonable terms to the existing owners in that case. Whether that is worth the hassle for a fraction of a percentage is unlikely.
- shoo 6y ago
  > partially behind a paywall. if you search for the title from the desktop version of Google it's possible to read the cached version
  - boogies 6y ago
    Or just stop allowing JavaScript.
- gumby 6y ago
  You’ll have no control, will probably find it difficult to sell your shares at any price, and while you’re entitled to any dividends, the controlling entities (Sam wer brothers) can take cash out in different ways and never declare a dividend.
- pas 6y ago
  The same as with any other (private) company. You have to deal with the majority shareholders and the board/management. It's not like you have any more control if the company happens to be public anyway. Also, big companies, private or not, in most countries have to retain an accounting auditor. Also, if you are a member of the company (as in you have equity) the management has a fiduciary duty toward you. (yes, yes, sure, in practice that means very little, they can siphon off the money in many creative ways), but usually people who are already minority owners have some trust in the majority owners. In some jurisdictions there are rules about what kind of mechanisms are available for the minority shareholders, and usually the get a board seat, and so they can kind of try to audit the majority. And in the end they can still sue, or threaten to sue, or whatever. That usually doesn't help with the valuation, and since the majority has more to lose, they can usually work out some minimally satisfactory deal between themselves. Aaaaand if not, we can finally get the popcorn, because then usually it gets dirty and juicy.
  - paxys 6y ago
    Practically speaking the biggest difference is that it is a lot harder to sell the shares to someone else.
    - pas 6y ago
      Yes, indeed, the whole point of being listed is that there's always liquidity (at least a market maker) and so a price signal. And in theory you can set your own risk limits. (Of course if trading is halted for the stock because a sudden drop/jump, that's a different story.) However, investing is always a story about managing risks (so expectations). Public or private, even if it's itself an investment company, it's still just one very fragile basket. And usually there's always someone who has so different risk/expectation profile that they'll take the other end of the transaction. Anyone holding "ETR RKET" has some strange/complex ideas.
- jariel 6y ago
  Someone should confirm, but 'de listing' is not technically the same thing as 'going private'. 'Not on the exchange' means you don't have to follow exchange rules, but if you meet certain criteria, you're still a 'public company' and therefore subject to the same public disclosure filings etc.. Usually that has something to do with the number of shareholders, in which case, if many do actually 'hold out' it may still be de-facto a public company. Another way of saying: 'you can't just go private because you have 50%'. But it's also Germany/Lux/EU so it's different 'over there'.

jansan 6y ago

> And these people were never known for their friendliness They were the founders of Jamba, a notorious company specialized in selling ringtone subscriptions for 3 to 5 Euro per month (called "Jamba Sparabo"). This may have well been the most hated company in Germany in the early 2000s.

rbrtdrmpc- 6y ago
They were hated everywhere, In Italy the damn frog ringtone became associated with shitty annoying people
- pantalaimon 6y ago
  It was this one, right? https://youtu.be/l_bTTUihfx0 https://youtu.be/l_bTTUihfx0

shoo 6y ago

> Rather than using external capital to buy investors out at a premium, the usual way to take a firm private, Mr Samwer has used company cash to buy back €223m ($260m) of its own shares. This pushed his clan’s stake to over 50%. He plans to use another €1bn of Rocket’s cash to buy out minority shareholders at €18.57 a share, the volume-weighted average price in the past six months but down from the ipo price of €42.50. > Investors are under no obligation to sell their shares, of course. But those who stay put will have little power to affect the course of the firm now that the Samwer brothers control the board with their majority stake. Rocket has stated it will be “better positioned” for long-term development if not listed on a stock exchange. It seems like the main tipping point is one group (the Sameer "clan") getting into a control position. Presumably enough other investors agreed to the earlier buybacks that allowed that to happen.