The Stock Saga — to sell or not to sell

Some of us joined Fabric in the early days before the first funding round. Like any other startup, we were offered stocks. At that time, the stock was valued at less than $1, as shared to us by the founders. Some of us had our stocks vest after the first funding, so the stocks were valued a bit more.

When the company raised $100 million and was valued at almost a billion dollars on July 1, 2020, we were all very excited. However, the newly appointed lawyer, Krupa Shah, another of Faisal’s friends, brought a bombshell. This group of Faisal’s friends never ceases to surprise.

We were told that the initial value of shares was $4.82, so if we left the company and wanted to receive our stocks, we would need to pay that amount for each share. This would be a large financial risk for any of us.

When asked about our options to sell, we received a vague answer. It was not clear whether we could sell our stocks in the secondary market or not. No one gave us a definitive answer of yes or no; instead, we were presented with a lot of legal jargon.

Rumors began to circulate that Faisal and the executives were working on selling their equity. People trying to sell reported that the market was flooded with fabric stocks to be sold in large quantities, something only the founders or executives could have done.

We raised questions about the stock issue at the monthly all-hands meeting and there was a lot of dissatisfaction. Krupa Shah then sent us an email saying that fabric would buy back our stocks at a discounted price and the details would be shared in a meeting. We were all very excited, but 10 minutes before the scheduled meeting on September 1, 2020, the meeting was cancelled. The buyback program was cancelled and we were still not given a clear answer as to whether we were allowed to sell our stocks in the secondary market.

It all became clear when the Business Insider report came out. The report made it clear what Faisal and his team were selling directly to other investors, with then-CFO Nevin Shetty leading the effort on Faisal’s behalf.