5 ms·
Think about morale at Lyft. You have employees locked in who cant sell for first couple of months. They are seeing their networth plummet everyday.
by dman 8y ago
Think about morale at Lyft. You have employees locked in who cant sell for first couple of months. They are seeing their networth plummet everyday.
- ahakki 8y agoShould've bought options to hedge.
- rongenre 8y agoIt's against any competently worded lockup agreement. "“Derivatives” is sort of a vague term, and there is a persistent folk belief that they have magic powers, that any legal or financial problem can somehow be solved by doing a derivative." https://www.bloomberg.com/opinion/articles/2019-04-08/lyft-is-angry-about-lockups https://www.bloomberg.com/opinion/articles/2019-04-08/lyft-i...
- Falcorian 8y agoThey are almost certainly not allowed by their employment contract.
- tyrust 8y agoContractual limitations mentioned by a couple other people aside, options aren't even available until 5 days after IPO. http://www.theoptionsguide.com/criterias-to-list-stock-options.aspx http://www.theoptionsguide.com/criterias-to-list-stock-optio...
- acchow 8y agoYou cannot trade options during your lockup.
- usaar333 8y agoIt's a tough call to make. By the time options came out, puts were extremely expensive relative to calls due to shorting pressure driving up hard to borrow fees. Aside from how bearish you had to be to justify buying them, you also need a lot of capital you might not have. Besides, any current employee is barred from trading options by the insider trading policy.
- holy_city 8y agoVersus not being able to sell at all? Hard to complain if you work at a startup and actually have a massive liquidity event
- acchow 8y agoEmployees saw their share price go from $44 in June (private markets) to a range of $62-68 during the road show last month to an IPO at $72, to close today at $61. Again, in less than a year, rose from $44 to $61 with a brief uptick to $72 in the middle. How is that plummeting?
- ajayjain 8y agoLoss aversion tells us that gains and losses have different emotional impact. In particular, perceived losses supposedly have a strong negative impact on people. [1] If Lyft employees value their shares at the IPO price, they might be feeling a loss all the way from 72 to 61. [1] https://link.springer.com/chapter/10.1057/9781137544254_13 https://link.springer.com/chapter/10.1057/9781137544254_13
- c1b 8y agoYou’re just arguing for the sake of arguing. It’s a net positive. Positive is good.
- mrnobody_67 8y agoBut anchoring.... people anchor to the all time high.
- Bajeezus 8y agoHe's got an extremely valid point, and morale at Lyft IS low, largely because of the reason above. Definitely not arguing for the sake of arguing.
- aliston 8y agoThey are going to get hammered on taxes, though. The IPO price sets the income they are taxed on while the price in 6 months determines what they actually take home. The result is that if you’re in California and the stock price falls to 30ish, you effectively take home nothing.
- 8y ago