So as per you the largest offer for common stockholders always wins? That is definitely not true since there are other considerations at play such as value creation post acquisition and/or strategic considerations.
> The board has a fiduciary duty to act in the interest of shareholders.
The problem is the 'shareholders' is made of multiple groups.
A relatively common setup is Investors, Founders, Other Common Share Holders (Employees, Gifts). If there are 10 seats, Other Common will likely only hold 1 vote.
So the board voted in its best fiduciary duty that represents 90% of the votes. It's quite easy to see how employees can get the raw end of the stick.
In most jurisdictions there are strict rules on protection on minority shareholders that make it illegal for the majority of votes from robbing other shareholders of their rightful share; in such events the minority shareholders are entitled to compensation, and this is what's happening now.
What's often misunderstood is what "fiduciary duty" means. It doesn't mean "make the most amount of money possible", it means "act in the best interest of".
It is absolutely true that the board has a fiduciary duty to shareholders, and many states have statutes specifically protecting minority shareholder rights. Delaware is fairly unfavorable to minority shareholders though.
If you’re hired by a Delaware Corp as a California resident holding shares in that company, wouldn’t the California rights be the ones the individual suing would have?
Otherwise one state would have a monopoly based on it being business friendl... oh wait, maybe that is the case.
In contracts that our lawyers gave us (and that we use) the state whose law will govern the contract is specified. It's always Delaware.
The corporate charter, and the bylaws of the corporation are all explicitly governed by Delaware law. These documents control what powers different share classes have regarding corporate ownership and operation.
TLDR: Delaware law is almost certainly the controlling law regardless of where the shareholder lives.
I think this is a misunderstanding between "shareholders" and "board members".
Shareholders can indeed vote however they want.
Board members are fiduciaries, and vote on behalf of all shareholders. That a board member is also a shareholder (say, the founder) doesn't remove her duties to all shareholders.
Seems like HN is doing something that’s breaking the direct linking to that Wikipedia page. Have to click through to the suggested page to get to the true article
Perhaps the founders believed their product would go further (not die) under Amazon or that they stood to benefit more from stock rewards long term