The value is determined based on a shareholder valuation, insolvent means having a negative cashflow and depleted reserves.
You can technically run a stock absolutely into the ground if everyone would place sell orders at market (i.e. without limit) and the only buyers would offer 1 cent.
That changes nothing about the profitability of the company though.
And while this is a very hypothetical scenario for a listed company, for an unlisted one you can freely adjust your list price. If he were to sell 1% for $1 to his neighbor, the company valuation would be down to 100 bucks.
Worthless =/= insolvent.
The value is determined based on a shareholder valuation, insolvent means having a negative cashflow and depleted reserves.
You can technically run a stock absolutely into the ground if everyone would place sell orders at market (i.e. without limit) and the only buyers would offer 1 cent.
That changes nothing about the profitability of the company though.
And while this is a very hypothetical scenario for a listed company, for an unlisted one you can freely adjust your list price. If he were to sell 1% for $1 to his neighbor, the company valuation would be down to 100 bucks.