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refers to a shareholder selling his shares of company stock for cash, and thus realizing his return (or his loss). It is a term near and dear to the hearts of investors when it refers to a profitable sale of shares. Cashing out at a loss is even preferable in many cases to holding stock in a declining company, particularly when the stock is illiquid because of restrictions on its resale. Cashing out can be accomplished in a variety of ways, including going public, selling the business, merging the business into a public company, exercising a put, or transferring shares to a new investor. See: Buy-Sell Agreements, Calls, Convertible Securities, Co-Sale Agreements, Demand Rights, Exits, Going Public, Liquidity Agreements, Piggyback Rights, Puts, Registration Rights.
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