Say, Suppose I have bought ESOPS assuming that the company will go public someday. What happens to the unlisted shares that I bought if the company cancels the IPO and decides not to go public? Is all my money lost?
1 Like
You’ll still hold the stocks but ownership will be of an unlisted company.
1 Like
But what do I do with the unlisted shares? It’s of no use so will I lose my invest amount?
Hi @Jack_R
If you have ESOPs of even an unlisted company, you will get ownership of shares in that company.
Since the company does not get an IPO/cannot raise money/remains unlisted or does not come up with a buyback, you will be at risk. However, you will be able to sell those shares off-market. In this case, the returns from the ESOP might be inadequate till the company goes public.
In case you leave that company, you will not be able to participate in the buyback process and sell those shares. However, you will still have the ownership and you will be able to sell once the company is listed on the stock exchange.
If a company cancels its initial public offering (IPO) and decides not to go public, so the company may explore alternative arrangements, such as converting the ESOPs into another form of equity or compensation, or providing alternative benefits to the employees in lieu of the cancelled IPO.
Thanks. Can u plz give some examples of alternative benefits?