There's been so much chatter (e.g. NYTimes article) about employees getting rich due to IPOs...but is that even true? As companies like Lyft deflate, who exactly is getting screwed? Are new employees' shares worthless? Old employees? Saudis? Softbank? Or are the people getting f'd the masses who have 401ks that buy this garbage?
Good question that I'd like to know more about too. Afaik VCs can sell on ipo so they are guaranteed at that point. Employees need to wait a period of time, so they may have to watch their equity deflate. Average stock buyers and/or bundled investments are treated as if it were any other stock, where it's caveat emptor. So the average investor probably takes the largest hit, because most of the risk is transferred to them. It's good to be a VC at this time.
VCs can't sell at IPO (unless the underwriter allows them to, which is rare). Lockout applies to every stockholder.
Employees get RSUs, which will be worth less but not worthless. VCs have a low cost basis, so they would be fine too. Regular folks who bought at $70-$80 would get screwed if Lyft continues to go down.
Don’t employees get stock options too?
Apparently most dont
RSUs can’t go under water like options can, there is no strike price.
Interesting. So Lyft gave you RSUs and not options Howlong have you been with lyft? Usually early employees get options
Pre ipo companies give way more shares to accommodate for the risk. At this point lyft employees still make more than most public companies
I feel like salary per year ends up close to if you had worked at a FANG. But it's typically better to be more liquid
Free money is made out of nowhere. They can lose 50% and it's still a windfall.
You don’t know opportunity cost ?
Lol, no one should join a startup for money. You join for the fun and learning experience. Most startups fail so you should assume a 0 windfall which is how I value private equity. If it become worth anything that's a win.
The people sitting on the sideline?
I know right. We’re all just going to be riding into the sunset with bags of ridesharing money.
Just to level set a bit here... Even recent hires have gotten an offer for T5 in the range of $200k base and $800k in RSUs. That’s at about $48 for the RSUs. Even if the stock falls to about $48, a T5 is making $400/year. If the stock falls to $24, it’s still about $300k. Lyft has started refreshers that are fairly decent. Given this, don’t think most employees are still doing good. Yes, we all would prefer the stock to be $88, but so is life
Oh F off. Your shit is BARELY worth 48 and you know that. Stop drinking the kool-aid, he/her/it. When you have normal Uber employees posting about starting an investment fund on here, you know we’ve reached peak. It’s not a coincidence that your company dropped your shit on the market while the going is still good (have fun when that lockup expires right around the time the presidential election will be in full effect). Should have eaten the blue pill.
Have you taken your crazy 💊?
The retail investors who bought at $70-80 got screwed big this time. Lyft offers were priced around $40-48/share during the last year, so there's still some upside (who knows what will happen in 6 months). Old timer employees will make a killing, high risk high reward.
No one gets screwed unless it collapses completely. In most cases, it's only the upside that gets reduced.
How is it possible for nobody to get screwed? Didn’t someone buy shares at ipo that are now underwater? And don’t new employees get options that quickly sag underwater too?
For every sale, there is a buyer. So of course people are losing money.