Has the valley ever seen a more hyped, yet disappointing hire than Mayer?
Jonathan Schwartz?
Yahoo misses profit expectations in what could be its last-ever earnings report
21–30 of 155 posts
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#22Earlier quoted context omitted.
How do you not make money and still owe a lot in capital gains?
Generally this occurs when you exercise an option to purchase stock, then hold the stock while it significantly depreciates in value. Fairly common scenario during the dot-com bubble. 1) Option at $1 2) Exercise at $100, spending $1 to buy. Tax on $99 short term capital gains owed, or ~$35. 3) Stock falls to $10 and sold for a $9 profit. You still owe $35 capital gains and spent $1. Net loss of $25 per share.
> 2) Exercise at $100 [1], spending $1 to buy. Tax on $99 short term capital gains owed, or ~$35.
This makes no sense. Simply exercising an option is not a taxable event--you're just trading a contract for shares of a stock. There's no money going into your bank account.
Furthermore, you aren't taxed short-term capital gains when you haven't realized a profit. You'd need to exercise AND sell at $100 / share for those gains to be taxable. The correct taxable amount in this scenario would be $9 / share ($1 spent, $10 earned, net gains = $9).
[1] Assuming you meant "exercise at $100" here.
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#23Earlier quoted context omitted.
Generally this occurs when you exercise an option to purchase stock, then hold the stock while it significantly depreciates in value. Fairly common scenario during the dot-com bubble. 1) Option at $1 2) Exercise at $100, spending $1 to buy. Tax on $99 short term capital gains owed, or ~$35. 3) Stock falls to $10 and sold for a $9 profit. You still owe $35 capital gains and spent $1. Net loss of $25 per share.
Wouldn't the prudent thing to do be to sell at least enough stock to pay the tax? If not allowed to sell at that point- just short stock to have the equivalent effect (minus fees)? Something else I've never understood to be rational - If you wouldn't buy $10 in yahoo stock- why would you hold it because you have it? My uninformed but seems logical answer would be sell the stock you got, pay the tax and buy and index…
The stock needs to be public by the time you exercise to be able to do this.
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#24Earlier quoted context omitted.
Generally this occurs when you exercise an option to purchase stock, then hold the stock while it significantly depreciates in value. Fairly common scenario during the dot-com bubble. 1) Option at $1 2) Exercise at $100, spending $1 to buy. Tax on $99 short term capital gains owed, or ~$35. 3) Stock falls to $10 and sold for a $9 profit. You still owe $35 capital gains and spent $1. Net loss of $25 per share.
Wouldn't the prudent thing to do be to sell at least enough stock to pay the tax? If not allowed to sell at that point- just short stock to have the equivalent effect (minus fees)? Something else I've never understood to be rational - If you wouldn't buy $10 in yahoo stock- why would you hold it because you have it? My uninformed but seems logical answer would be sell the stock you got, pay the tax and buy and index…
> Wouldn't the prudent thing to do be to sell at least enough stock to pay the tax?
It's not liquid yet, that's the issue. That's what is nice about most RSU plans -- they immediately sell to cover, so you don't receive a ton of stock with an attached tax bill.
But illiquid options are different; the capital gains tax is for the paper-wealth you just received. That same paper wealth can evaporate, but the tax bill remains.
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#25Poor execution, lack of innovation. At least Mayer can run for public office now...
We have no idea what happened at Yahoo. They may have failed two years earlier without Mayer, for all we know.
I thought she was the most qualified CEO they had in a very long time.
Yahoo Mail has been a huge driver of their user retention, webmail usage has almost fully shifted to mobile. Facebook has gobbled up a big chunk of display ad revenue along with Youtube and video ads in general. Pretty much everything they can't control sucks for Yahoo.
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#26Earlier quoted context omitted.
Theranos. The valley is very sensitive towards women running companies with large valuations, that company's woes would otherwise have flown completely under the radar. The next one on the "overhyped but disappointing and in the valley list" would be Clinkle and its now 24 year old CEO. No women there but as you will see the valuations drop off a cliff pretty quickly in this list.
Why is the primary factor behind Theranos's bubble the fact that its founder was a woman? That is a notable aspect but Elizabeth Holmes also leveraged powerful connections and a TED-friendly dream to get that hype. There are plenty of female-led startups that did not reach any notable status despite having a woman at the helm.
The bubble and valuation? Thats not the real discussion here. The meltdown of a company that has no consumer product would never have drawn clicks. Fidelity could have marked it down 50 times and never made the news. There are tons of biotech startups with lofty valuations.
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#27Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#28Has the valley ever seen a more hyped, yet disappointing hire than Mayer?
Carly Fiorina.
Yahoo was dead man walking before Mayer came on. She wasn't the right hire to save it, but she wasn't the hire that killed it.
Fiorina drove HP into the ground hard. It's survived, only barely, but no thanks to her.
And while both are women, I'd keep an eye on both Nadella (Microsoft) and Pichai (Google). Nadella's got a turn-around job. Pichai's starting from a better position, but with a company that's grown fat, lazy, distracted, and manifestly evil. I'd actually say Pichai's got the harder job, and I've not been particularly impressed.
(The fact that I had to look up each of their names to confirm spelling says something about the lack of billing either's getting.)
I'd argue too that Sculley at Apple was quite possibly Worst Hire Ever, in terms of total impact and lost potential. Latter proven by Job's return.
(That said as someone who's not particularly a fan of Apple or Jobs.)
Gil Amelio at SGI did spectacularly bad things rapidly as well.
Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#29Re: Yahoo misses profit expectations in what could be its last-ever earnings report
#30Earlier quoted context omitted.
Wouldn't the prudent thing to do be to sell at least enough stock to pay the tax? If not allowed to sell at that point- just short stock to have the equivalent effect (minus fees)? Something else I've never understood to be rational - If you wouldn't buy $10 in yahoo stock- why would you hold it because you have it? My uninformed but seems logical answer would be sell the stock you got, pay the tax and buy and index…
The stock needs to be public by the time you exercise to be able to do this.
When Yahoo bought Geocities, both were public.