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How does this cap work in practice? If I bought shares at $1 and someone wants to buy them from me at $200 what happens?
by drexlspivey 4y ago
How does this cap work in practice? If I bought shares at $1 and someone wants to buy them from me at $200 what happens?
- dorkwood 4y agoThey keep it, but it goes to the non-profit arm of their business. “But any returns beyond that amount… are owned by the original OpenAI Nonprofit entity.” https://openai.com/blog/openai-lp/ https://openai.com/blog/openai-lp/
- drexlspivey 4y ago> The fundamental idea of OpenAI LP is that investors and employees can get a capped return if we succeed at our mission Sorry I still don’t get it. If a private equity investor has shares and another investor wants to buy them off of him at 200x they can do that right? Are they obliged to give any excess returns to the non profit? Can’t they just sell the shares at 50x and then buy them back (perhaps through some other entity) to get around that trivially? Or does this refer to return from dividents?
- whimsicalism 4y agoMy guess is it likely has to do with dividends. But if your returns from the stocks are capped at 100x your share value, an efficient market would mean you share value never grows 200x.
- Throwaway045814 4y agoIt's not just about that. Perhaps there are benefits in having control of the company that make the shares more valuable than just the profit would make it out to be. Perhaps there's prestige in owning these shares.
- tnel77 4y agoSince OpenAI isn’t publicly traded, I don’t think it’s an issue. If they were to go public, rather than being purchased by Microsoft, I’d guess that this cap would go away. Wall Street isn’t know for caring about poor people.
- deleted 4y ago[deleted]
- charcircuit 4y ago>Any excess returns go to OpenAI Nonprofit. https://openai.com/blog/openai-lp/ https://openai.com/blog/openai-lp/