Re: Buyouts etc.
I agree with 'stockrookey' for the most part in terms of timing, prospects of it happening, cash and/or restricted/free trading share scenarios etc. but thought I'd expand on the question of "when one is bought out and for example woman "A" has 100,000 shares at .01 and the buyout company is at .1 does she now own 10,000 of the new company?" because it seems simple on the surface, but...
In general (and simplest) terms, that assumption would be correct.
But the fact is ALL mergers, acquisitions, takeovers, buyouts, etc, call 'em what you like, are typically negotiated (or are 'hostile takeovers' whereby an un-negotiated 'offer' is made directly to shareholders without management endorsement or negotiation).
For example...an entity looking to 'buy-out' GOIG would, in theory, make an offer to the GOIG shareholders (if it was 'friendly' than GOIG management would have been in on the negotiated price). In the above scenario, if ABC company was trading at a dime, and GOIG at a penny, than a simple 'offer' would be to give GOIG shareholders 1 share in ABC Co. for every ten they have in GOIG. Easy enough on the face of it.
But here's where it gets 'interesting' and/or 'tricky'. Generally, ABC Co. would 'sweeten the pot' and maybe offer 1.1 shares (for example) for every 10 GOIG shares (effectively valuing GOIG at better than the penny it is currently trading at) to get shareholders to 'approve' and vote in favor of the transaction. GOIG shareholders would then vote to accept/reject the offer (with the Board of Directors of GOIG, which doesn't exist, recommending acceptance...or not, if they were still trying to negotiate a better price, or if it's a 'hostile' bid). Problem is, Sutton solely has control of the vote with his preferred shares (with a conversion option to commons at any time).
So at the end of the day...if any negotiated 'deal' is good enough for Ike, you'll get whatever he has negotiated, i.e. maybe you get 1 for 10 in ABC Co., but maybe he's good with, or only could negotiate, 1 for 15. Or maybe he just 'sells' his prefs and the commons still trade as GOIG. The only saving grace is that Sutton, as CEO, has a fiduciary duty to ALL shareholders. So if he did a deal that was clearly to his benefit but to the detriment of, or oppressive to, existing shareholders, he'd open himself up to lawsuits. And that's what keeps lawyers who represent plaintiffs and defendants in lawsuits involving pink sheet companies in brand new Mercedes'.
Hope that helps any who were wondering (or maybe it just thoroughly confused them). At any rate, I just scratched this out over lunch and will not be able to clarify/answer questions so you'll have to kick it around yourselves.
Bottom line...'buyout' could be good or could be bad. Depends on price and terms like most everything else.
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