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I was not privy to when Facebook started granting RSUs instead of options. My use of the term "underwater" was based on what was reported. Still, this is a red

I was not privy to when Facebook started granting RSUs instead of options. My use of the term "underwater" was based on what was reported. Still, this is a red herring. The fundamental point of my comment was that in the past couple of years, every single person here had the ability to purchase Facebook shares on terms just as favorable if not more favorable than many Facebook employees without having to spend a single day working for the company. In fact, in the past several years, you could have on favorable terms purchased shares in any number of tech companies that have delivered fantastic gains to shareholders. Obviously, timing investments (or trades depending on your persuasion) is easier said than done, but it's probably no more difficult than trying to determine whether the startup you're going to work at for the next four years of your life is the next Facebook or the next MySpace.

prostoalex 12y ago
> every single person here had the ability to purchase Facebook shares on terms just as favorable if not more favorable than many Facebook employees But RSUs are not purchased, they are gifted. So having an opportunity to purchase 10,000 shares of FB at low-low 2012 prices is still expensive compared to a gift of 10,000 shares vesting over 4 years. I pulled the 10,000 number out of a hat, but I'm not too far off - here's a question from 2011 http://www.quora.com/Is-110-000-and-15000-RSUs-a-good-starting-salary-at-Facebook-for-an-Ivy-League-PhD http://www.quora.com/Is-110-000-and-15000-RSUs-a-good-starti... numbers were probably more attractive at earlier years.
- 7Figures2Commas 12y ago
  RSUs are not "gifted." They are a part of one's compensation package, and you have to work for them. Consider this scenario: a company offers me 10,000 RSUs when its shares are valued at $50/share. When the company goes public the value of the shares soon drops to $20/share. What I thought was worth $500,000 is now worth just $200,000 (pre-tax). That's a huge difference. Had the company's shares been valued at $20 the time I was offered a position, I might have negotiated for more of them. Now, to be fair, maybe salary plus $200,000 is still the best compensation package (and overall outcome) available to me, but that doesn't mean that it was risk-free or cost-free. As for the cost of purchasing 10,000 shares of Facebook stock outright, yes this is expensive. But you can easily establish a meaningful leveraged position through the use of options if you have the conviction. Also, keep in mind that this is precisely what employees do when they fail to sell their shares when they first have the chance. A Facebook employee who has $500,000 in newly-vested shares that can be sold, but who doesn't sell, is in effect purchasing $500,000 in Facebook shares in the hopes that they will rise in price. If they fall in price, his or her loss is still very much a loss, even if it looks less painful because the shares were purchased with labor instead of cash.

prostoalex 12y ago

> every single person here had the ability to purchase Facebook shares on terms just as favorable if not more favorable than many Facebook employees But RSUs are not purchased, they are gifted. So having an opportunity to purchase 10,000 shares of FB at low-low 2012 prices is still expensive compared to a gift of 10,000 shares vesting over 4 years. I pulled the 10,000 number out of a hat, but I'm not too far off - here's a question from 2011 http://www.quora.com/Is-110-000-and-15000-RSUs-a-good-starting-salary-at-Facebook-for-an-Ivy-League-PhD http://www.quora.com/Is-110-000-and-15000-RSUs-a-good-starti... numbers were probably more attractive at earlier years.

7Figures2Commas 12y ago
RSUs are not "gifted." They are a part of one's compensation package, and you have to work for them. Consider this scenario: a company offers me 10,000 RSUs when its shares are valued at $50/share. When the company goes public the value of the shares soon drops to $20/share. What I thought was worth $500,000 is now worth just $200,000 (pre-tax). That's a huge difference. Had the company's shares been valued at $20 the time I was offered a position, I might have negotiated for more of them. Now, to be fair, maybe salary plus $200,000 is still the best compensation package (and overall outcome) available to me, but that doesn't mean that it was risk-free or cost-free. As for the cost of purchasing 10,000 shares of Facebook stock outright, yes this is expensive. But you can easily establish a meaningful leveraged position through the use of options if you have the conviction. Also, keep in mind that this is precisely what employees do when they fail to sell their shares when they first have the chance. A Facebook employee who has $500,000 in newly-vested shares that can be sold, but who doesn't sell, is in effect purchasing $500,000 in Facebook shares in the hopes that they will rise in price. If they fall in price, his or her loss is still very much a loss, even if it looks less painful because the shares were purchased with labor instead of cash.