Say a company issues you, as a benefit or compensation, shares in the company. You have a certificate for say 10,000 shares when it was trading at $1. Did the company pay anything to generate those 10,000 shares? What gave it value?
The best I can guess is that the company has an initial valuation and the amount of stock available at the initial selling price totals that valuation. The shares are essentially worthless in terms of value (except for maybe par value?), but the shares give either a chance to benefit from a companies success.
When an employee is given stock as compensation, I'm curious if the company pays anything for it, or if they are just transferring a portion of the company ownership. And if you sell it, how does that effect the company - do they have costs associated with such trades?
Submitted September 28, 2018 at 09:13AM by exitof99 https://ift.tt/2xGfbpK
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