Zhone gave the city 100,000 stock warrants as well as $6 millionin cash for the land on which it is now building a 300,000-sfheadquarters building. The warrants give Oakland options to buyZhone stock at $4 per share should the company go public.
City officials estimate the land's market value at about $7.9million. That means the stocks must reach nearly $20 per share forthe city to get a fair price on the deal. Oakland bought the landfor $9/sf several years ago, and appraisers recently pegged itsvalue at $12/sf.
It's not your typical deal, but Zhone is not a typical startup.The 10-month-old firm raised $500 million in venture capital rightoff the bat last October in a year when $7 million was theaverage.
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