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Right now, anyone who joined Facebook in the last 5 years is underwater on their options.
by cbtacy 4y ago
Right now, anyone who joined Facebook in the last 5 years is underwater on their options.
- Zhenya 4y agoI doubt they get options, RSUs most likely.
- ink_13 4y agoThis is pedantically correct, but in practical terms, if you got RSUs at any price in the last five years, they're still worth less than you were offered.
- deadmutex 4y agoThere is a huge difference between stock price being 20% lower than RSU grant price vs. 20% below option strike price. With options. If options are way out of the money, then they're worth a lot less than the RSUs.
- sangnoir 4y agoFar from being pedantic: having underwater on options is very different from having RSUs worth less than they were in the past. If an individual were to liquidate one of each; the underwater option would have negative monetary value, whereas the RSUs will always have a positive value. Never mind the convoluted tax implications of exercising options that are nominally not underwater, but whose stock has a lower value that at the time of granting.
- loeg 4y agoRSUs, and yes.
- jchonphoenix 4y agoActually, everyone is underwater on RSUs. We do 4 year vesting so even people who started 5 years ago are vesting their stock from 4 years ago.
- dweekly 4y agoTechnically you can't be "underwater" on RSUs, you just get less dollar value in shares than you were expecting. (Acknowledged that this kind of sucks but when FMV on your options is below your strike price they are literally completely worthless, which is what it means to be underwater, and this is a much worse scenario than taking a haircut on your RSUs!)
- itake 4y agoYou can be underwater on RSUs if you have a lockout or blackout period for when you can sell. Uber had this problem [0] after their IPO. If you factor in taxes, you could end up owing more in taxes than the shares are worth (ex: vest price is $10/ea, taxes are $3/ea, current price you can sell at is less than $3 == underwater). I think Aurora employees were locked out for 180 days, but force to exercise options at IPO price. [0] - https://www.cnbc.com/2020/08/28/nearly-200-uber-employees-sue-over-stock-price-decline-since-ipo.html https://www.cnbc.com/2020/08/28/nearly-200-uber-employees-su... [1] - https://www.google.com/finance/quote/AUR:NASDAQ https://www.google.com/finance/quote/AUR:NASDAQ
- CydeWeys 4y agoUnderwater is being used in this context to mean that the shares are currently vesting below their grant price.