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If you exercise shares in a dark market why don't you just mark them at zero? If they aren't trading you can just make up the price and that goes for any good n
by honkhonkpants 10y ago
If you exercise shares in a dark market why don't you just mark them at zero? If they aren't trading you can just make up the price and that goes for any good not just shares of companies.
- fossuser 10y agoJust because a company isn't public doesn't make it a 'dark market' (not sure what that is). The 409A valuations are real and there are rules surrounding how exercise happens. You can't just sell them outside of that and not pay taxes. You could theoretically sell the shares once exercised to some other private investor if you can find one, but you'd still have to follow the same exercise rules.
- pm90 10y agoWould this information be public? Sounds like it would be easy to get an idea of what a stock is worth in the private market from this data.
- abcampbell 10y agoYes, if you had the data. That's why shares that trade openly are called 'public market' shares. Reading this thread is fun, it's like trying to see Silicon Valley try to reverse engineer something hiding in plain site. 95% of these problems would go away if these companies were forced (by investors or employees) to go public.
- lmm 10y agoFeels like there should be some kind of "shotgun clause" equivalent. The government wants to value your illiquid asset at $x for tax purposes? Fine, but if you disagree with that valuation you get a corresponding right to sell that asset to the government for 90% of $x and make it their problem.
- mjevans 10y agoIt would be interesting if you could selectively do that, to pay your taxes with the asset valued at that purchase rate.
- hx87 10y agoIt could also be a /very/ interesting solution to the Proposition 13 (grandma priced out of house) problem.
- mandevil 10y agoWhat on earth would the government do with a stake in a privately held company? Buy and hold investment? How would they use the voting power?
- lmm 10y agoThey could buy and hold - the government has a long time horizon. Or they could auction it off. They could abstain from votes, or they could do something more complicated.
- aninhumer 10y agoYou could also have the market do this, by allowing public bids on anyone's assets, and considering the highest refused bid as the tax valuation.