5 ms·

Twitter is already the dominant force in whatever it is you would call what they do, and they can't fund their operations without huge influxes of cash at regul

Twitter is already the dominant force in whatever it is you would call what they do, and they can't fund their operations without huge influxes of cash at regular intervals. This makes me wonder why investors would let them spend investor money on something that doesn't at all help them stay afloat long enough to become profitable. Perhaps there is something in this that makes them more likely to be a success? Perhaps they are making employees agree to stay for some amount of time as a part of accepting an option buyout? Giving away 5% of the value of your company seems like an expensive way to avoid some SEC paperwork, so I'm at a loss on why they would do this, other than just to be really nice.

eekfuh 15y ago
I think it does align some of the founders and early employees with the investors. The founders get to pocket a few million dollars, stop worrying about their paychecks and from there, they can shoot for the stars, which is something the investors want.
- edanm 15y ago
  I'm guessing the founders have already cashed out, at least partially.
kinkora 15y ago
In some ways, paying out to employees does "help them stay afloat". Think about it. They are obviously doing this to retain their employees. Imagine if you work for Twitter for years and have all of these stock options but can't do a single thing about it because you know Twitter will not IPO any time in the near future. I'm pretty sure at some point you'll be feeling some frustration. Obviously I am speculating and it doesn't necessarily mean that's the case but to me, it sounds like they are doing this so that they can "reward" their employees. If it was me working for Twitter and was given a chance to cash in some of my employee stock, I would be a very happy and grateful employee. If you look at it this way, then you can think they are doing this to retain some of their most loyal employees to continue working for them hence "keeping them afloat".

eekfuh 15y ago

I think it does align some of the founders and early employees with the investors. The founders get to pocket a few million dollars, stop worrying about their paychecks and from there, they can shoot for the stars, which is something the investors want.

edanm 15y ago
I'm guessing the founders have already cashed out, at least partially.

kinkora 15y ago

In some ways, paying out to employees does "help them stay afloat". Think about it. They are obviously doing this to retain their employees. Imagine if you work for Twitter for years and have all of these stock options but can't do a single thing about it because you know Twitter will not IPO any time in the near future. I'm pretty sure at some point you'll be feeling some frustration. Obviously I am speculating and it doesn't necessarily mean that's the case but to me, it sounds like they are doing this so that they can "reward" their employees. If it was me working for Twitter and was given a chance to cash in some of my employee stock, I would be a very happy and grateful employee. If you look at it this way, then you can think they are doing this to retain some of their most loyal employees to continue working for them hence "keeping them afloat".