Conversation

Jesse Powell
@jespow
Question for anyone holding stock. A private company has an offer from an investor to buy shares at X, which the company feels is 10% undervalued. However, the company knows of a shareholder (could be you or someone else) who would sell at a 20% discount. Should the company:
  • tell seller $offer, intro
    16.6%
  • broker midpoint + fees
    12.9%
  • prop buy low, sell high
    24%
  • see results
    46.5%
867 votesFinal results
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Raoul Pal
@RaoulGMI
Secondary always sells at a large discount as it doesn't offer new capital to the firm so removed a net source of needed capital.
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Jesse Powell
@jespow
Agree. Question is what duty does the company have to the seller and other shareholders? Who should take the spread? Should company try to profit from the trade at all or pass up the opportunity to benefit the buyer and/or seller?
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Dreem
@dreem_lense
Are we talking traditional companies, or new younger lead companies? I think this makes a large difference in the answer.
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