71–80 of 81 posts
Since they haven't vested then they're lost, unless the buyer is very generous.
That very much depends on how twitter structured their options and the details of the contract for purchase. I've seen setups where all unvested options vest immediately with a purchase and I've seen setups where the options are gone just like that. There is a whole range of options in the middle that are possible as well.
Earlier quoted context omitted.
Heh, we all know the truth, hence why the question pop-up in the first place. Elon will cut deep in left and right among employees within an year. I guess only 30% of existing ones will still work at Twitter in a year after deal is done.
My limited experience in engineering organizations, I have found that the core task can be accomplished with probably 25% fewer engineers. The rest are working on products that are going nowhere or are generally inefficient at their jobs. It's not even "50% of the people don't do anything, we just don't know what 50%". It's pretty obvious to everyone. Is this the norm? Are there any eng orgs that exist without this p…
Now, technically the Bus Factor is more about the company completely collapsing, but in an optimal organization, each person is doing something critical to the survival of the company all of each workday. They aren't spending 4 hours on Facebook or creating meaningless menu changes no one cares about. Maybe if one of them were hit by a bus the company wouldn't be completely unable to function, but their coworkers would struggle to continue to keep everything running.
This isn't really a good plan in the long run, even if it is most efficient until someone gets hit by a bus, so instead you over staff a little. You can't quite just hire N extra employees at the company level and expect them to be able to jump in seamlessly to any gaps that appear as other employees quit or retire or die, so you instead end up overstaffing by 10-20%. To every group of five or ten employees, you add an extra whose job responsibilities overlap the rest. Now if someone leaves, you have their replacement already halfway ramped up, and you can spread their responsibilities around without creating too much stress.
Now, you could just let all of your employees work 10% less hard, now that they have someone else to help lighten the load, but that's not really efficient either. Granted, some of them will find a way, and that 40 hours nominal becomes 36 hours real work and 4 hours posting on HN, but you can still add some extra work on top.
So you tell your employees that, in addition to the bread and butter work that pays the company's bills, they also have to Do Something else. Maybe there are some ideas for improving the company's core product, new types of bread, different flavors of butter to try out. Maybe you tell them to spend 20% of their time on bluesky research.
This brings us to the problem of making changes to a big, complicated engineering project. When you are just maintaining a giant piece of software, that's kind of a linear problem -- you assign a person or two to each part of the infrastructure, and they keep it in shape. When you are improving the giant interconnected pieces of infrastructure, it becomes a quadratic -- if someone on Service A comes up with a neat idea for how to make it better, they're going to need people on Database B, Backend C, Frontend D, Logs E and twelve other departments to make corresponding changes to their pieces of the infrastructure as well.
So the end result of this is that you have a piece of software that could be maintained indefinitely by 2 people, you add a third for redundancy, a fourth and fifth to iterate on new features, and three or four more to keep up with infrastructure changes in related projects elsewhere in the company.
And ta-da, your simple project is now overstaffed by 4x.
Earlier quoted context omitted.
That very much depends on how twitter structured their options and the details of the contract for purchase. I've seen setups where all unvested options vest immediately with a purchase and I've seen setups where the options are gone just like that. There is a whole range of options in the middle that are possible as well.
Interesting, what's the point in having a vesting period if they'll all exercise regardless?
Most agreements have a liquidity event (i.e. an acquisition) clause. They this sort of thing happens, your unvested options can be vested and exercised immediately.
Twitter already had a liquidity event, the IPO. A going-private transaction is unlikely to be contemplated in any existing options or RSU agreement. Unvested options are technically worthless, being an option to purchase securities that will no longer exist (TWTR). In practice it would be very silly to do this to employees unless your explicit goal was to massively reduce headcount.
Other clauses can force the buyer to acquire your stocks, like a tag along clause.
Earlier quoted context omitted.
Fiduciary duty doesn't seem to mean much. People kept saying that, if board didn't accept, then they would violate fiduciary duty. Then, board accepted the first offer without further negotiation. Who does that in a large deal like this? At least, they should have got a few billions more.
No I meant it in a broader sense. Whenever I ask someone why companies are so hyperfocused on growth every single quarter they usually cite fiduciary duty or something. I am not sure if it's a law or a company by law
In terms of fiduciary responsibility, here’s something I found: https://www.upcounsel.com/board-of-directors-fiduciary-duty
I believe you can be sued for breach of this, and can certainly lose your board seat. I would guess it will devalue the company if a breach were to occur.
Earlier quoted context omitted.
Well that's just impossible bud. The number of twitter employees in 2018 was 4000 and it is about double that now. What on earth do you think they've all been doing? You can't possibly run something like twitter with just 2000 employees like you suggest. The fail whale might reappear.
While I agree it's silly to think musk is going to fire everyone, Whatsapp hit 1 billion messages a day with only 11 engineers. I certainly think twitter could function at a base feature set with far fewer than 2k.
I get that most view it as a proxy for business growth, but I fear there's a growing group of non-technical investors/leaders/founders who see FAANGs with 4000 engineers, so you're only successful if you have that many too.
Earlier quoted context omitted.
Twitter already had a liquidity event, the IPO. A going-private transaction is unlikely to be contemplated in any existing options or RSU agreement. Unvested options are technically worthless, being an option to purchase securities that will no longer exist (TWTR). In practice it would be very silly to do this to employees unless your explicit goal was to massively reduce headcount.
Lawyers contemplate lots of things in multi-page agreements that most people don't read :-) The two times I've been acquired (by a public company but I think cash deals), unvested stock has been converted to the acquiring company's stock at the equivalent value and on the same vesting schedule. Of course, this will be a private company so the situation is different.
Yes, this is common practice for good will and retention reasons. But generally not legally required.
Earlier quoted context omitted.
Fiduciary duty doesn't seem to mean much. People kept saying that, if board didn't accept, then they would violate fiduciary duty. Then, board accepted the first offer without further negotiation. Who does that in a large deal like this? At least, they should have got a few billions more.
No I meant it in a broader sense. Whenever I ask someone why companies are so hyperfocused on growth every single quarter they usually cite fiduciary duty or something. I am not sure if it's a law or a company by law
I think it is just a vague guideline because in this instance the board didn't even try to negotiate for a few billions more.
Earlier quoted context omitted.
Do you also think that you can't just fire 12 floors worth of people?
When has that ever worked out for anybody? What are you even saying, life isn't some sort of Joseph Heller novel bucko. This is the big leagues, you need all those people to keep the trains running on time. Are you seriously trying to tell me that some smooth operator can just come waltzing into a well oiled operation like Twitter Inc and simply purge thousands of highly skilled specialized knowledge workers assigned…
But, what's it that they say -- pride goeth before a fall?
If Twitter collapses into a burning hulk is that -really- a bad thing?
I don't know why any sane twitter employee would stay on. Twitter employees have spent years being mocked as useless idiots that can't ship code and are destroying society with "Wokeness". Now they don't have any financial upside to look forward to either. I follow a bunch of Tesla/Spacex accounts on Twitter and you can plainly see that any dissent from Musks wishes will be punished with online mobs and harassment. C…