3 ms·
Some companies do tender offers (stock buyback) to give employees liquidity, but unfortunately the c suite and investors (those who typically have a more favora
by joshribakoff 4y ago
Some companies do tender offers (stock buyback) to give employees liquidity, but unfortunately the c suite and investors (those who typically have a more favorable liquidity preference) can cause the tender offer to be oversubscribed if they enter more sell orders than there are buy orders. Usually this means common stock owners do not get to participate. Preferred stock can also be converted to common, but not the other way around.
- peter422 4y agoTender offers will only happen when somebody wants to buy stock, which means they think the stock price is lower than it will be in the future, which means they expect the company to grow or keep growing. The companies where liquidation preferences are going to screw you are not going to be having tender offers, because by definition nobody wants to buy the stock! If they did want to buy the stock at above the current price then liquidation preferences aren’t coming into play. (Note: I’m sure there are examples where a company did have a tender offer at some decent price before falling off a cliff and having a bad exit where the common stock was wiped out… but that is not common at all)