Submitted by hellothere564738 t3_yffqbu in explainlikeimfive
Fred2718 t1_iu39jpj wrote
Reply to comment by [deleted] in ELI5 How can a public company become private? by hellothere564738
Part of the contract you made when you bought your shares is something called "drag along". This means that a small minority of shareholders who don't want to sell, can be forced to sell. There are specific, well defined cases where this applies. A total buyout is such a case.
Most small shareholders of public companies are not even aware of the details of shareholder rights ,voting, board control, acquisition, etc, because it almost never matters to them. But your rights have various standard limitations, and in a buyout, merger, bankruptcy, etc. those limitations are important.
LochFarquar t1_iu493rn wrote
"Drag along" rights are a thing, but that's no what's going on in a public company going private transaction. These transactions are completed by merger, which does not require consent of all the parties.
Fred2718 t1_iu4ykzg wrote
Correct. I just quick-posted without thinking about the difference between seed investment and public.
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