How does funds are distributed when company like Facebook is sold?

[AlwaysHaveAQuestion]

Hi,

I know this can be silly question to you, but I need to know how does these things work?
Suppose Facebook sells for $10 billion for cash, will the board of directors and CEO will distribute the amount between them and leave nothing for others?

Or if a company just got couple of investments and it is just a company consisting of 3 board of directors and few workers, how get the full share of the money once company is sold?

I am confused at this point, please help me out.

[bananaman]

Facebook is a public trading company, so shareholders own the company.

To buy facebook(FB) in cash, the buying company(BC) has to buy the shares from the shareholders. That's how the money from the sale is distributed - by paying the shareholders for their shares.

Another way to buy FB is a shareswap. Instead of paying the FB shareholders in cash for their shares, their FB shares can be swapped for the shares in the BC. The shareholders end up with more valuable shares(otherwise they wouldn't agree to the sale).

Or it can be a combination of cash and shareswap.

But buying FB is different from taking it over, in which case the BC only needs to buy a controlling amount of FB shares.

[AlwaysHaveAQuestion]

Facebook is a public trading company, so shareholders own the company.

To buy facebook(FB) in cash, the buying company(BC) has to buy the shares from the shareholders. That's how the money from the sale is distributed - by paying the shareholders for their shares.

Another way to buy FB is a shareswap. Instead of paying the FB shareholders in cash for their shares, their FB shares can be swapped for the shares in the BC. The shareholders end up with more valuable shares(otherwise they wouldn't agree to the sale).

Or it can be a combination of cash and shareswap.

But buying FB is different from taking it over, in which case the BC only needs to buy a controlling amount of FB shares.

Thanks for that, and what is the scenario of private company? All the funds will be with the board of directors?
Also if facebook is sold, how much part CEO and Board of Directors get?

Thank you very much for your help, this forum has great members indeed!

[The Stealthy One]

Facebook is a public trading company, so shareholders own the company.

To buy facebook(FB) in cash, the buying company(BC) has to buy the shares from the shareholders. That's how the money from the sale is distributed - by paying the shareholders for their shares.

Another way to buy FB is a shareswap. Instead of paying the FB shareholders in cash for their shares, their FB shares can be swapped for the shares in the BC. The shareholders end up with more valuable shares(otherwise they wouldn't agree to the sale).

Or it can be a combination of cash and shareswap.

But buying FB is different from taking it over, in which case the BC only needs to buy a controlling amount of FB shares.

Correction: Facebook is not a publicly traded company. The company has plans to IPO at some point in the future, but has not yet done so. Shares have been distributed to employees, but because of the IPO delay, the company has actually bought some of the shares back from employees who wished to sell them back to the company.

At any rate, when a company is sold, money changes hands in return for shares in the company.

[PsiPro]

Thanks for that, and what is the scenario of private company? All the funds will be with the board of directors?
Also if facebook is sold, how much part CEO and Board of Directors get?

Thank you very much for your help, this forum has great members indeed!

If the company has a CEO and a Board of Directors, there is typically already a ownership system established and the money would be divided out accordingly.

Your asking who is entitled to the money when the company is sold, and the answer is whoever owns the company. If there are shares in the company, its divided up amongst the 'owners', if its a partnership, the money is divided up amongst the partners according to their controlling interest. Whats the secretary or engineer get? Nothing except possibly severance or a new boss unless they own stock.

There is no firm answer, it depends on the structure of the company.