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> It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported. It get
by spondyl 3y ago
> It's actually made of stock options that vest if the share price went above $150, but the expected value was $110 million so that's what was reported.
It gets a little weirder than that I suppose since you might have a great deal of shares in a company, which you never exercise so you could say that money doesn't really exist until exercised.
You can however use those shares as collateral for a mortgage or other line of credit which is a pretty common tactic for wealthy people to avoid paying income tax that they otherwise would if they were to sell said shares.
- astrange 3y agoIn this case he didn't get any shares. If he'd used the options to get a mortgage then he's got a pretty big hole in his pocket when they became worthless.
- taf2 3y agoIsn’t that kind of lending what caused the Great Depression? Pretty sure you can’t take a loan out on a promise of an option value…
- WalterBright 3y agoShares can and do go up and down quite a bit. I bought heavily into one tech company where the shares went down 90% in a couple months. It was pretty devastating for me. > You can however use those shares as collateral Only shares that you own, not have an option to buy. And only a portion of the shares, and if your shares become worth less than the loan, you still owe the money, and they'll come after any other assets you have. > you might have a great deal of shares in a company, which you never exercise You're confusing owning shares with having an option to buy shares. They're very different. You'll also owe income tax on the difference between the exercise price and the current price of the shares. (A friend of mine didn't know that, and consequently lost his house.)