RE: How many worthless stock options do you have?

["Hannah Bissell" <to -dot- hannah -at- usa -dot- net>]

> Don't assume that a stock option is worthless simply because the
> company is
> out of business. According to an article in the Globe and Mail's Report on
> Business Magazine (several years ago, so I can't cite the actual article),
> there have been cases in Canada at least where the stock itself retained
> value because as a shareholder, you therefore owned part of the company's
> intellectual property. When another company purchased that intellectual
> property from the bankruptcy liquidators (or the venture capitalists who'd
> funded the company), the stock suddenly became worth something
> again because
> each share was still entitled to some proportion of that purchase price.

Something similar happened to my cousin. She worked for a small start-up in
Oregon for a short time and was paid in stock options. The company went
under and they were bought out. In the course of 2 short years they
exchanged hands several times. During one purchase they became fully vested.
During another they split. At some point she left the company and purchased
them. Somtime later the company was bought by AT&T and she now has stock
worth a good deal more than she paid. I do remember that part of it depended
on the deal made at the time of purchase. I know several people at the now
defunct PSINet who were concerned over whether their stock-options would be
honored if they were bought out. Bankruptcy - that I don't know about.

Hannah Bissell
to -dot- hannah -at- usa -dot- net


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