Is there any good reason why preferred stock exists? It just seems like another tool to screw people over in favor of investors.
The reason is to protect investors.
Philz Coffee close to closing deal to sell to private equity firm for $145M
31–40 of 89 posts
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#32> Dalla worked at Philz for nine years until last year, when he was laid off. He said that many longtime employees left around the same time as the company’s culture shifted to a more profit-driven, corporate culture. > On his way out, he said that CEO Sadarangani urged him against exercising his stock options — options that will now, barring changes to the current deal, be worth nothing. “I always assumed they would…
correct, not exercising them would have been better.
The tax hit, too, depending on the type and amount of options
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#33Wasn't Philz the only Pro-Palestine coffee chain. That's too bad.
I fail to understand why a coffee shop should be taking sides on geopolitical conflicts.
I agree. No idea why Starbucks, McDonalds, Zara etc. came out shouting support for Israel out of nowhere. Requiring a boycott from sane people.
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#34Earlier quoted context omitted.
"In a liquidation, common stockholders receive whatever assets remain after creditors, bondholders, and preferred stockholders are paid." Coupled with what sounds like an already bad financial state of the company... I'm not claiming no foul play, but it looks like there is a reasonable avenue for what is happening.
The article implies that it's not a liquidation or bankruptcy, though, just a sale. I don't know how you can buy a company without buying its stock from the shareholders, given that they are the owners of the company, but there must be some special circumstance that's not mentioned in the article.
There are tricks. I've been through such an acquisition. The purchaser sets up a new "Philz Coffee Co LLC" then purchases assets and operations for the exact amount the preferred stock holders want. They then liquidate the old company. Because the old company was never legally "bought" the common stock holders are SOL because they now own stock in a fictional company. That's not to say they don't have options... but I am not a lawyer and that definitely involves lawyers.
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#35they can just cancel stock?
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#36Wasn't Philz the only Pro-Palestine coffee chain. That's too bad.
The founders immigrated from Palestine so that's not surprising. They even donate a portion of proceeds to Palestinian aid efforts. Surprised to see they are going under though. They have been a grocery store staple for a while.
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#37Wasn't Philz the only Pro-Palestine coffee chain. That's too bad.
if you make coffee at home you can decide yourself whether it’s pro Palestine or pro Israel
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#38Earlier quoted context omitted.
"In a liquidation, common stockholders receive whatever assets remain after creditors, bondholders, and preferred stockholders are paid." Coupled with what sounds like an already bad financial state of the company... I'm not claiming no foul play, but it looks like there is a reasonable avenue for what is happening.
The article implies that it's not a liquidation or bankruptcy, though, just a sale. I don't know how you can buy a company without buying its stock from the shareholders, given that they are the owners of the company, but there must be some special circumstance that's not mentioned in the article.
I agree with you and don't know enough to speak authoritatively. That being said, I did find this definition of liquidation (below). The article hints the business was in trouble, the way I'm reading it, if the sale doesn't cover all obligations, its would be a liquidation.
"Business liquidation involves selling off a company’s assets, such as equipment, inventory, and real estate, and using the proceeds to pay off debts and obligations. This process usually occurs when a business is no longer profitable, facing insurmountable financial challenges, or the owner decides to retire or pursue other opportunities."
Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#39Re: Philz Coffee close to closing deal to sell to private equity firm for $145M
#40Wasn't Philz the only Pro-Palestine coffee chain. That's too bad.
I fail to understand why a coffee shop should be taking sides on geopolitical conflicts.
everyone takes a side on everything. explicitly or implicitly. intentionally or unintentionally. due to the interconnected nature of the world, it is impossible to construct a true-neutral position. the appearance of neutrality becomes more difficult the more important an issue is to those you interact with.
so, it's not really well-defined to ask whether or not a coffee shop "should" be taking sides, it will take one in all situations. it is a (slightly) more tractable question to ask "how should a coffee shop take a side?" Given how difficult this question is to answer still, I like to answer it with, "doing good is generally aligned with the long-term profit-motive."
this is also why boycotts are actually useful! though collective action, you can align the profit-motive with "good" clearly. this makes it easier for a coffee shop to move in-line.