3 ms·
>(If a company valuation stays flat, stock options are worthless - but RSUs have value) Can you help me understand why? I'd expect if you're granted options at
by temp_praneshp 3y ago
>(If a company valuation stays flat, stock options are worthless - but RSUs have value)
Can you help me understand why? I'd expect if you're granted options at a strike price of $Y, you will still make money as long as the valuation at liquidation time is more than $Y.
- yen223 3y agoIf the company value stays flat, that means its valuation at liquidation time is equal to $Y
- MrDarcy 3y agoPut another way, your capital gains are zero.
- temp_praneshp 3y agoBut in any offer I have received, I've seen two numbers: Preferred value(?): X, and strike price: Y, with Y well below X. In any case, you don't have to teach me all about options here, I was just curious :)
- deleted 3y ago[deleted]
- bfung 3y agoThe kicker is “at liquidation time”, which is unpredictable and unknowable. Most of the time, options go to zero due to company shutdown.