Employees of Sequoia-backed Hmlet stripped of stock options after distressed sale

FOUR months after learning of their company’s impending sale to a European operator, current and former employees of co-living startup Hmlet were informed that their stock options will now be worth nothing due to a mechanism that allows certain Hmlet investors to have the first claim to proceeds from an acquisition.

Following the sale of Hmlet to co-living company Habyt, Hmlet’s employee share option programme (ESOP) will be terminated and any options granted will be cancelled, according to a document viewed by The Business Times (BT).

The letter, signed by Hmlet chief executive Giselle Makarachvili, said that based on the terms of the Habyt deal, the ordinary shares in Hmlet have zero value. An email to those impacted by the ESOP cancellation explained that this was a result of the company’s “liquidation waterfall”.