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Would it not be possible for an employee to hedge/short-sell the stock using i.e an option?
by chvid 11y ago
Would it not be possible for an employee to hedge/short-sell the stock using i.e an option?
- jsjohnst 11y agoI'm not familiar with Spotify's terms with employees, but it's not uncommon for this to be expressly forbidden in the stock option / Rsu grant agreement.
- jperras 11y agoThey could perhaps buy call options against their direct competitors (Apple and Pandora, even though the latter is doing terribly) in the event that the IPO goes poorly, but that would essentially require that Spotify losses be countered by gains in the competitors, which is of course not a guarantee. Basically: they're kinda fucked if it goes south.
- knoble 11y agoMark Cuban did this when selling broadcast.com to Yahoo. It's a pretty amazing hedge: http://investmentxyz.blogspot.com/2006/05/cubans-collar-anatomy-of-famous-trade.html http://investmentxyz.blogspot.com/2006/05/cubans-collar-anat...
- brisance 11y agoSpotify isn't listed so any form of derivative contract is not standardized and is thus subject to liquidity and counterparty risks.