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Your point here seems to be that cash is preferable to stock as an acquisition payment, which is trivially true but not a very interesting point. Yes, an all ca
by AndrewBissell 12y ago
Your point here seems to be that cash is preferable to stock as an acquisition payment, which is trivially true but not a very interesting point. Yes, an all cash deal would have been preferable to what we're getting. So would a 5x higher deal price.
I'm sure lots of startup employees make a hash of things when they're first presented with an uncertain windfall in the form of restricted stock. It's a risk we're all aware of and need to manage for ourselves, but that doesn't mean we've somehow been dealt a raw deal.
- 7Figures2Commas 12y agoNo, my point was that it's hard to realize a meaningful windfall as a startup employee. It wasn't that you were dealt a raw deal, or that stock as a form of payment is inherently bad. My response to you simply observed that when employees fail to convert their stock to cash as soon as possible, they are effectively investing the proceeds of a capital gain in the stock of their new employer. You mentioned that you had a deep background in markets and trading, so I'm sure you're well aware that lots of very intelligent people make irrational investment decisions. With that in mind, you might want to consider that the number of people who opted not to immediately cash out stock received in an acquisition (betting that it would be worth more in the near future) far exceeds the number of people who took all their cash from an all-cash acquisition and purchased stock in their acquirer in the open market. This is a result of perception, not logic.