Share price question

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sowrudy
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Joined: 22 Feb 2022, 03:26

Share price question

Post by sowrudy »

Hi All

Probably a dump question but I have been curious to know.

Just say my company is ABC Pty, and when I listed the company in jan, I issued 2 shares, $1 each. So just say I received $2 that month.

In Feb, due to good news, my share in the stock market surged to $4 per share. So the market value of the 2 shares I issued, is now $8.

In Mar, I decided to delist the company, and obviously I need to refund to the shareholders, my question is, do I pay them back the initial value of $2 or $8?
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Marek Muc
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Re: Share price question

Post by Marek Muc »

$8 or even more due to control premium
sowrudy
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Re: Share price question

Post by sowrudy »

Thanks Mark, what if tye total shares I owed to to investors, is larger than the total net assets (especially cash) I have, how can I effort to "buy back"?

Just say below is company BS
Cash 100

Liability -50

Retained earnings -20
Owner cap -28
Ordinary share -2 (but on stock market, the value is 1000 due to some reddit speculation maybe)
JRSB
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Re: Share price question

Post by JRSB »

Why would delisting mean you can 'refund' shareholders?
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Marek Muc
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Re: Share price question

Post by Marek Muc »

@sowrudy - It's more a question of structuring the transaction and that's not my expertise
@JRSB - sorry but I don't understand your last post
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Marek Muc
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Re: Share price question

Post by Marek Muc »

PS. and what's the point of buying the shares back if their market value is inflated? I'd rather issue more!
JRSB
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Re: Share price question

Post by JRSB »

Marek Muc wrote: 19 Mar 2023, 13:56 @JRSB - sorry but I don't understand your last post
question was for poster.... to me, delisting means taking a company private, so wondering why that means you can 'refund' shareholders. perhaps the investment was more like debt. 'obviously I need to refund shareholders' isn't obvious to me!
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