Agree 100% with fat_lazy_union. The ONLY way to go with your stock options when they become worth something is to do a same day sale. Don’t be greedy, don’t hold them expecting the value to go up because it could go down. Lately, most good IPO’s have seen their stock go up 50-100% in the following months beyond their IPO. However, after that, a lot of the investors want to cash out, and then your stock drops down to below your strike price, and you have nothing but a piece of paper.
Stock options suck. Many companies back in the .com days used them instead of salary, so an employee who would normally earn $100,000 per year would get like 100k options and a salary of 50k per year instead. This was great when the market was good, but these days you’ll never see that.
Most technology companies are granting about 750 shares to their lowest level employees (clerks, order processors, receptionists, etc), 1000 shares to jr level sales and marketing positions, 2500-3000 shares to IT workers and programmers, 5000 to entry level managers (supervisors, and managers at the lower end of the payscale), 10,000 to more senior management, 50,000 to VP level management, and 250,000 to the CIO, CFO, CTO, etc.
The reason for this is that the IRS recently changed the tax codes and stock options are now a major liability on a company’s books, so they cost a lot more to grant (even if they are not in the money), whereas before the company could grant all the options they wanted and they didn’t have to expense them until they were actually exercised. It’s something called FAS123R if you’re bored and want to look it up on google. LOL
So, from my example there, usually only the highest up in the company stand to gain from the stock options. They will often times get lower strike prices then the ordinary employees too.
Stock options are designed to make the rich people richer. The average joe doesn’t do too well with stock options these days.
