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Change of ownership - what to do with cashed-out options

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  • Change of ownership - what to do with cashed-out options

    Hi Folks,

    My spouse is part of a large, (currently) privately-owned company, where she has a number of stock options with the company.  We just found out that there are plans for another company to become the primary shareholder, which (I believe) effectively means that they are selling the company.  As part of the deal, all options are accelerated, and they are asking that existing shareholders and option-holders repurchase at least 25% of their existing stock/option value.

    Obviously, we'll take the tax hit since we're effectively exercising options.  The question is how to handle the rest.  While part of the agreement is that existing holders will acquire the equivalent of at least 25% in the "new" stock, there is the option to acquire more.  Is that the best move to make, or should we pull out and reinvest elsewhere in the market?

    Are there any other areas we need to be concerned and ask questions?  I've gone through these in tech companies, but never in a sector that's as heavily-dependent on professionals and insurance reimbursements.

    Thanks!

    Dmd

     

  • #2
    Hard for me to imagine that I would recommend buying more but we really have no specifics to render judgment.
    Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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    • #3
      I understand.  Much of it is still under wraps, so it's particularly hard to provide specifics.  Are there specific pieces of information that would help inform any advice?  It will all still be privately held, so I can't research nearly as much as I'd like!

       

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      • #4
        Not really - this is a really personal issue, lots of $$ involved, and, imo, generic advice could be more harmful than helpful.
        Working to protect good doctors from bad advisors. Fox & Co CPAs, Fox & Co Wealth Mgmt. 270-247-6087

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