3 ms·
> In fact, after the IPO, he had to pay an enormous amount of taxes on that, which was money he didn't have at the time [1]. He got that tax bill by exercising
by mullingitover 13y ago
> In fact, after the IPO, he had to pay an enormous amount of taxes on that, which was money he didn't have at the time [1].
He got that tax bill by exercising his options--he bought shares at $.06 that were worth significantly more, thus giving him a great deal of taxable income. It was in the form of shares, but it was still income. To say he didn't have the money at the time is a bit dishonest--those shares were (and are) highly liquid.
- ahomescu1 13y ago> those shares were (and are) highly liquid. Are they? If he tries to sell all of them, will he get exactly what they're valued at? Selling a quantity like that will probably pull the price down significantly.
- mullingitover 13y agoI'm guessing purchasing all those shares drove the price up, too. Might've been the whole point in buying up that many shares when the IPO was teetering.
- ahomescu1 13y agoInteresting, but my guess is something else happened. Since he bought the shares at a fixed price, I assume they came directly from the company itself (how can you buy at a fixed price on a competitive market?). Since he was allowed to do this, I assume those shares were never for sale on the market, so they couldn't impact the price. This is all guesswork though. Anyone here more knowledgeable that can jump in?