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Comment by kabdib | Hacker News Reader

That's exactly right.

"Sorry, it's the red options that have worth, all of those blue options were devalued in [some arcane legal event] and are worthless now."

I've thought about talking to a lawyer, but I'm guessing that what they did was totally legal, on the order of selling the company's assets to a company of the same name for a dollar in hand, or something like that, with some kind of structure to keep the major investors happy.

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There are laws requiring major shareholders to protect the interests of minority shareholders for this exact reason. It may be worth talking to that lawyer.

Interesting. The email I got from their stock administrator read:

> As a result of a transaction in 2001 that created CompanyName Acquisition Corporation, now named CompanyName, Inc., all equity interests in the predecessor companies were extinguished.

I guess I'll talk to a lawyer. They were sold for $3.5B, so that might be an interesting up-side.

Wow, I hope you write about what you find out. The situations like that I've heard of, and admittedly that's mostly from following the press, is that the old shares are traded for shares in the new entity. If minority owners aren't protected, it's a crack in the foundation of silicon valley.

But is this 'legal' even if the employee didn't sign anything to change the previously agreed upon arrangement (options)??

As with every legal question the answer is "sometimes." But typically, yes it is legal. See the comment below that basically allows the "extinguishing" of options under certain restructuring.

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