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If it’s RSUs why are they worthless?
Because they can't be sold right now. And the future date at which they could be sold is undetermined and doesn't appear to be any time soon.
If a person had 1000 RSUs that were on paper worth 40k, now they are worth 30k. Either way they can’t be sold right now. And I don’t understand how 30k is “worthless”
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They’ve hired 1000s of people with promises of an IPO and currently worthless RSUs. They would need to address that with a change in pay structure and likely some large bonuses up front. But otherwise agree with your reasoning.
If it’s RSUs why are they worthless?
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
isn't that $200k/year in stock worthless anyways?
What is an internal valuation, and does Stripe actually lose anything from lowering it? My cynical experience suggests that companies usually have more to gain by lowering their valuation than they do by inflating it. Apologies if the article already described the possible negative impacts to Stripe caused by a decreased internal valuation. I’m unable to read it since it requires a subscription I cannot afford (due t…
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isn't that $200k/year in stock worthless anyways?
Not exactly, but has huge valuation risk and is likely to end up being $50k all said and done. The trouble with equity is that it can fluctuate wildly in value and you only have yourself to blame (because the decision to sell is ultimately yours, and there can be a lot of anxiety and regret attached to it).
my heart goes to engineers, who joined a startup on bold promises to make it, but never got to IPO, M&A or even worse - were forced to execute options to later sell them at loss
Remember that Stripe changed its RSU grant structure a year or so ago, so this won’t negatively affect newer employees. Stripe gives out a fixed amount of $$ value of stock each year now. The typical recent senior hire will get around $200k a year in stock. Now that the valuation is lower, they’ll be granted more stock units than before, which is good. Getting granted fewer stock units at a ‘fake’ higher valuation wo…
Earlier quoted context omitted.
Why would they need to IPO? Is liquidity stopping them from building anything right now or growing? Why give up any amount of power for a strong private company? Stripe could stay private forever (or 20 years which is the avg lifespan I think of private companies)
They’ve hired 1000s of people with promises of an IPO and currently worthless RSUs. They would need to address that with a change in pay structure and likely some large bonuses up front. But otherwise agree with your reasoning.