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> When exercising options, sell enough on the same day to pay the tax bill. That assumes the stock is trading publicly or at least you can legally sell them.
by vishnugupta 5y ago
> When exercising options, sell enough on the same day to pay the tax bill.
That assumes the stock is trading publicly or at least you can legally sell them.
In India most of the companies ask you to exercise your options within 2-3 months of quitting job. And most of them are not public companies. So there's a big dilemma. Exercise and take tax hit and hope that the company goes public and doesn't tank post IPO. Don't exercise and possibility of big regret. So..sort of a bummer.
Ironically (and sadly) two of the most publicised IPOs in India (PayTM and Zomato) have tanked since their IPO.
- llampx 5y agoIPOs are a game of "let the institutional investors exit and leave retail holding the bag" I'm not investing in any IPOs unless it's at fire sale prices, and I know my line in the sand where I will take a loss rather than hope and pray.
- throw0101a 5y ago> IPOs are a game of "let the institutional investors exit and leave retail holding the bag" The Rational Reminder podcast had an episode on them a little while ago: > We’ve previously compared IPOs to lotteries that are prone to inflated valuations and low returns. Today we welcome “Mr. IPO,” Professor Jay Ritter onto the show for a deeper dive into IPO performance, for his insights into SPACs, and to hear his research into why economic growth doesn’t correlate with stock returns. Early in the episode, Jay unpacks how long-term IPO returns perform against first-day trading. While exploring the role that venture capital plays in tech IPOs, Jay talks about why negative earnings don’t affect tech IPOs in the short-term before sharing how skewness factors tend to impact young companies. Reflecting on how IPOs are usually underpriced, Jay discusses how the interests of companies are not aligned with the interests of IPO underwriters. After looking into IPO allocation, Jay compares the 2020 ‘hot IPO market’ with the internet bubble of the late 90s. Later, we ask Jay about what special-purpose acquisition companies (SPACs) are and why they’ve exploded in recent years. His answers highlight their investing benefits, risks, and why SPACs might be a better option for companies than IPOs. We examine how SPACs have historically performed and then jump into our next topic; why economic growth isn’t a good indicator that a country is worth investing in. He touches on why returns don’t correlate with economic growth, the place of capital gains and dividend yields when investing abroad, and how innovations in an industry can lead to higher stock returns. We wrap up our conversation by asking Jay for his take on whether the stock market is efficient before hearing how he defines success in his life. Tune in to hear our incredible and informative talk with Jay Ritter. * https://rationalreminder.ca/podcast/139 https://rationalreminder.ca/podcast/139 They're generally not a good idea unless you're on 'the inside' and can get early access.
- llampx 5y agoSPACs may be better for the companies, but the SPAC bear market of 2021 also shows that they can be horrible for retail.
- CamelRocketFish 5y agoThey ask you but are you legally obliged? What’s to stop you from not doing that.
- vishnugupta 5y agoYes; it is stated in ESOP grant agreement contract. 1-3 months is the norm I've seen.
- vishnugupta 5y ago> companies ask you to exercise your options PS: when I say “ask you” it’s part of ESOP contract, the options expire if not exercised.