5 ms·

Well, all of those Facebook employees have lost 41% of their value of their options portfolio since the IPO. Imagine how you would feel seeing 41% of your hard

by gsibble 14y ago

Well, all of those Facebook employees have lost 41% of their value of their options portfolio since the IPO. Imagine how you would feel seeing 41% of your hard earned cash just evaporate because management priced the IPO too high or doesn't care about the stock price. There's many more reasons, but that's a big one. No one is going to come work for a company for equity that doesn't care about their stock price.

abc_lisper 14y ago
> hard earned cash What??
- wisty 14y ago
  Microsoft had the same problem. Facebook employees apparently work pretty hard. They get huge rewards, when their stock goes up, so they want to company to succeed. Once the stock stops shooting up, they stop caring about the company. They won't make money from their stock options, they'll make money from getting promotions or a good bonus. Impressing their manager is going to be more important than the company's overall success. Employees will lose interest, and managers will have to introduce more rules, to "incentivise" the workers (and other managers).
  - Zenst 14y ago
    You raise a very interesting point. The aspect were a employee's motivation is two-fold. One were it is stock-option motivated and the other were progress in the company is the motivation. Now they should and you would of thought that they would be one and the same. But from personal experience they are seperate. Gets down to the classic: it's not what you do but how you are seen to be doing it.
- vikas5678 14y ago
  Are you saying stock options are not a reward for their hard work? Its a part of their compensation package, they had to work for it. Its not a lotto.
  - z92 14y ago
    He is saying whatever they earned is not "cash".
guynamedloren 14y ago
Imagine all the employees who were paper 'millionaires' (just over a million) for a short while, but no longer are... that's got to be a bit disheartening.
- dedward 14y ago
  This situation is far more common than most people may realize, and has been for a long time. Lots of us have been potential future millionaires only to watch stock prices fall before we could, or did, exercise stock options.
forgottenpaswrd 14y ago
"Imagine how you would feel seeing 41% of your hard earned cash..." Yeah, superhard way of making millions. Making a web site in your 20s and convincing the pension funds to give their savings from 30 years of real "hard work" while trying them not to notice the scam before you sell all your stock.
tedsuo 14y ago
Leaving aside the psychology for a moment, and assuming the market prices the stock correctly before employee's are allowed to exercise their options, doesn't that mean they would get the same amount, regardless of whether the IPO was high or low? Am I missing something? Bringing psychology back in, yes I can see how it would really tear people up to feel like they are "missing out," and the understanding that they are getting the "true value" is probably not much of a substitute. If the money in my bank account fluctuated daily, for reasons beyond my control, it would drive me right up the wall.

by gsibble 14y ago

abc_lisper 14y ago

> hard earned cash What??

wisty 14y ago
Microsoft had the same problem. Facebook employees apparently work pretty hard. They get huge rewards, when their stock goes up, so they want to company to succeed. Once the stock stops shooting up, they stop caring about the company. They won't make money from their stock options, they'll make money from getting promotions or a good bonus. Impressing their manager is going to be more important than the company's overall success. Employees will lose interest, and managers will have to introduce more rules, to "incentivise" the workers (and other managers).
- Zenst 14y ago
  You raise a very interesting point. The aspect were a employee's motivation is two-fold. One were it is stock-option motivated and the other were progress in the company is the motivation. Now they should and you would of thought that they would be one and the same. But from personal experience they are seperate. Gets down to the classic: it's not what you do but how you are seen to be doing it.
vikas5678 14y ago
Are you saying stock options are not a reward for their hard work? Its a part of their compensation package, they had to work for it. Its not a lotto.
- z92 14y ago
  He is saying whatever they earned is not "cash".

guynamedloren 14y ago

Imagine all the employees who were paper 'millionaires' (just over a million) for a short while, but no longer are... that's got to be a bit disheartening.

dedward 14y ago
This situation is far more common than most people may realize, and has been for a long time. Lots of us have been potential future millionaires only to watch stock prices fall before we could, or did, exercise stock options.

forgottenpaswrd 14y ago

"Imagine how you would feel seeing 41% of your hard earned cash..." Yeah, superhard way of making millions. Making a web site in your 20s and convincing the pension funds to give their savings from 30 years of real "hard work" while trying them not to notice the scam before you sell all your stock.

tedsuo 14y ago

Leaving aside the psychology for a moment, and assuming the market prices the stock correctly before employee's are allowed to exercise their options, doesn't that mean they would get the same amount, regardless of whether the IPO was high or low? Am I missing something? Bringing psychology back in, yes I can see how it would really tear people up to feel like they are "missing out," and the understanding that they are getting the "true value" is probably not much of a substitute. If the money in my bank account fluctuated daily, for reasons beyond my control, it would drive me right up the wall.