A unicorn I worked at for two years is going IPO soon. The RSUs are double trigger vest.
I want to hedge the risk that the stock gets cut in half in-between the IPO and the lockup expiration.
Here are the two strategies I have found so far:
1. If you have X shares/RSUs, short X additional shares at open of IPO. Cover after lockup expires.
Pro: lock in a sale at the IPO price Con: requires significant margin reserves & cost-to-borrow might be high
2. Sell costless collar on X shares using options contracts.
Pro: doesn't require huge margin reserves Con: options market is not guaranteed to exist any time during the lockup
Can I do any better than this?