Confluent RSU vs Stock options
Asking for a friend (YOE: 0). Confluent has given two options: 1. 5050 RSUs with 4 year vesting 2. 10100 stock options with 4 year vesting Which one should be preferred?
Most imp info missing- Grant price for the options? Basically you have to make a guess if after IPO what price each of those options will be at and how much ull net after taking the grant price out. The fact that they are offering both... signals to me that they are less confident of a home run with IPO. Cos why not just give everybody RSUs and if they are confident of the upside engineers will flock and those hired will stay longer. With options, the burden of decision is being put on the employee who has no access to the information the board has. In this case... since the no of options is 2x... the diff between the expected share price at IPO and the grant price will have to be at least half of the total value of the share for u to make the same money as RSUs. eg. IPO price- $10. Grant price $5. Money with options (10-5) * 10100 = 50500 Money with RSUs also $10 * 5050 = also 50500 So if the grant price was less than half say $3 then u would be better off with options. If the strike price is say $7 for the same case... u only make $30300 with options but would have made ~$35k with RSUs Obviously what the IPO price will be is a guessing game.
Thank you for detailed info!
flikkerop I think it is not that they are less confident of a home run with IPO. I guess this guy got an offer from Confluent earlier than March, when Confluent decides to replace option with RSU. However, recently the strike price is much higher, and then hiring team gives them such an option. It happened for lately join new hires in Snowflake IPO as well.
When do you actually get allocated the RSU shares because there could be tax implications put on you without actually owning real shares. Plus options you do have to pay for so there is that
Location?
OP, can you tell us FMV vs strike price they told you
25 $ strike price
Isn’t that insane? What is the FMV they are quoting 50$?
100% RSU. $25 strike price for options is ridiculous. Confluent may worth $10/share after IPO if cloud conversion fails. They may worth $100/share otherwise, but I don't think it will happen soon after IPO. Just ask for more RSU.
They aren't providing options anymore. Urs is old offer. Share the comp offered for giving back to community.
Last time I checked, strike price was around 13 or 14$ which in itself was insanely high. OP, I think you are mistaken. My guess is 25$ is FMV, and 10$ is the strike. Since this offer was generated 6 months ago. What’s the RSU value they said? At what valuation? Also any idea when they plan to IPO?
Can’t comment on the price, but doesn’t matter when the offer was generated, strike prices for options are always determined after the start date (at all companies afaik), so if OP hasn’t started (which seems likely given the question) it wouldn’t be the strike you mentioned. Also no one at Confluent is allowed to discuss any IPO timeline, so I don’t think you’ll get an answer from Confluent or any candidate/new hire on “when they plan to IPO”, at least not one you can trust.
Just saw the numbers for Confluent , what do you guys think of 77 Mil Rev for Q1 2021, do you think it will cross 15 Bil Valuation ?
Very low revenue 😞 and growth is mediocre (50 percent which will decrease over time). Don't expect larger than 10billion market cap.
Recently (2-3 months back) changed a lot of branding to "Data in Motion" not sure what to make of it. Can be a positive thing if able to accomplish what they are planning to do rn
Totally depends on the strike price of the options. If strike price < 50% of the stock price, then go for options