Saturday, October 30, 2010

409A Changes the Game - No Post-IPO Profits for Facebook Employees

"The conventional wisdom is that you join a hot startup pre-IPO to get the low priced stock options. Techcrunch reports that some people are joining Facebook now to get in on pre-IPO shares.....The effect of the 409A requirement, and the new movement of private investors buying vested stock options from employees, is that the pre-IPO valuations, and thus the employee stock option price, are very close to the expected IPO price. So, how will there be a big bump in the stock price at IPO? My guess is there won't be a bump...and conventional wisdom will change."

Article from Don Dodge HERE

1 comment:

Local SEO said...

Those employees are not contended on the compensation they are receiving. That's why they are looking for something that will also increase their salary. But I think it's not fare on behalf of their company.