Former employee here stuck holding Class A and Class B shares.
Given a total equity loss - will I be able to start tax write-offs with the 2021 tax year or does this Ch11 complete next year?
Any documents forthcoming outlining my losses or is my original purchase and Stretto downloads all I need in case of audit?
14 replies (most recent on top)
To the person who doesn’t blame DS, you must be new or have not been paying attention because that man you now call CEO has been part of that same cancer that put Riverbed in the state it is in. He’s just the only one who survived. Keep sippin’ that Kool-Aid.
The company right now has very little clue what the market wants/needs except they know “data” is where the $ is. And it’s through Aternity and Riverbed products they think they have something magical but if it has taken this long, what makes the co think it’s any different now? Whatever data is being ingested is clearly not marketable. The data scientist team is a joke. This has been tried in IT (apps team) and was just a big waste of $.
TB’s equity is (more-or-less) the same as the employee class A, and they will get $0 for it. However, I reckon they still won’t lose out on the deal. The reason is that DEBT and EQUITY are different things…
TB holds most of the DEBT. The debt is being reduced by $1billion, but TB have been sucking $100’s of millions in interest out of rvbd for years. I suspect that if we added up interest on the debt and tax write-offs, TB are roughly breaking even, and are happy to exit this “su---r bet” with their shirts on.
For TB the equity was always house money - it’s great to have if things work out, but the debt was the hedge if things went south. The problem for class A holders is that THEY have no debt to fall back on. They were sold a bill of goods when they signed up for these “private equity grade” shares.
TB is losing all their equity. The money TB gets as a part of the CH11 restructuring is paying back a portion of what they lent Riverbed. ALL equity is going to $0 in this deal.
Come on, let's be fair. The longest serving member of the current ELT has been with the company for what, three years? Four? What we're seeing today is the result of a LONG chain of poor decisions and risk aversion from the people who've been around the longest. Good old Uncle Jerry and the vultures at TB are the ones you ought to be blaming, along with a bunch of lifer middle managers who've been more interested in defending their petty fiefdoms and fighting their political battles than building the business. I can give you a long list of people to be mad at, but honestly? Smoot isn't on it.
We needed to be taking risks and innovating, moving into new markets instead of focusing on a handful of deep pocketed customers, and instead the order was always "just keep doing what you're doing, we've got great products that just need some tweaks" until it became obvious that what we've been doing hasn't worked, and our products are obsolete and have been for years. If this is all a surprise to you, then I don't know what to say. You haven't been paying attention.
When I was laid off a few years back, I tried to hang on to my Class B shares. They were worth pocket change anyway, so I viewed them as a lottery ticket. They forced me to sell those too. It was only a few hundred dollars (if that) so it didn't really matter... I'm just glad I got my Class A money.
Dan Smoot and the rest of the leadership have kicked ALL current and former employees where it hurts the most. They should be ashamed of how they have thrown away our monies without a second thought.
I knew the class B shares were toilet paper, but it’s a new level of sl--e to completely cancel the Class A’s.
I’d be OK with all of this if TB was also losing all of their equity and a ton of money on the deal, but somehow you know that they’ve protected themselves, while leaving us holding the bag.
Very bad taste in my mouth about this. Vulture capital is a plague on society.
I doubt they will bother with tax forms. Last time I had equity go defunct I got nothing.
To the poster who asked how much people paid per share - share price is kind of irrelevant. People could put in as little as $5K - some did $10K - some $100K. Most knew of the risks but TB said "same Class A shares as us" so we thought we were at the same risk as them - didn't know not all Class A shares created equal. In my case I was paid out well in unvested RSUs and options and decided to risk just a small amount of those proceeds. Now I, like a prior poster, just wondering if I can sell some gains this year in all the great companies in my portfolio and use the big loser RVBD equity to offset those gains.
Agree with the other poster. You’ll likely get a tax form. I feel terrible for the founder share bag holders but at least you were offer to purchase. How much was each share?
@1yoi+1dRoYSvX I would imagine shortly after the thing is finalized. You can bet people that are writing down MM are going to want to take it in 2021.
Did TB actually have the same class A shares as employees? I’m wondering how they managed to sc--w the employees and keep their own stake.
I was horribly naive and invested in the class A "founder shares" because I figured that having the same status as TB would help me, because private equity always saves themselves first.
Well, they saved themselves, but also figured out a way to pull a fast one on us, too.
Does anyone have a sense of when we'll know? If I'm going to take a loss on the shares, it's not a bad opportunity to sell off some stock at a profit and let the losses cut down on my taxes from that.
You should get a tax form from the company once it's all done. At least thats what happened at a friend of mines company when they canceled equity.