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Scottrade sold or Citigroup bought my shares of stock...without my knowledge?

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hypernova:

--- Quote from: danny_galaga on October 08, 2011, 08:13:21 pm ---Hypernova, I would have thought you would get written advice that this was going to happen? I know in Australia it's the norm. I don't think a company can make any major changes (like a split, or being bought out, or a cash return etc) without advising it's shareholders.

--- End quote ---

They might have...I'm not exactly a diligent mail reader.  Once I found out the reason, I was fine with it.  I just wanted to be sure I wasn't screwed out of money, which I wasn't.

Necro:

--- Quote from: Hoopz on October 17, 2011, 03:33:17 pm ---
--- Quote from: Necro on October 17, 2011, 03:22:17 pm ---I learned about reverse splits when my first employer did one right before they IPO'd - basically screwing all the staff since what they had been telling us the stock price was going to be was AFTER the 4:1 reverse split, effectively making our options - provided upon hiring - worth a quarter of what they'd been telling us they'd be worth.

Gotta love it.

--- End quote ---
Something else has to be happening here.  Whenever there is a change like a split, reverse split, etc, the total value of your investment does not change (excluding a change in market price).  So they had a reverse split, your number of shares decreases, but the exercise price would have increased making it the same value as before.  Now, the market price may have moved on the stock but the exercise price on your stock options won't change so the total package will be the same before the split as after.  

Whatever firm handled your employee stock options should have explained that to you though.

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I completely understand what it means, etc.  However, when you're told the company is going to be IPO'ing a few months after you start at a given price, logic flies out the window in that regard.  

That, and the fact that certain staff were 'protected' from the reverse split - mainly the c-suite.

So, to be clear - reverse split by a large company is prob. not a big deal.  Reverse split by a small company results in employees with options getting f-ed sometimes due to the way options are setup and distributed among execs compared to 'normal' staff and the types of options given to each.

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