Bolt Financial's loans come due

Re:Bolt Financial's loans come due by throwaway92394 on Thursday May 26, 2022 @02:37PM (#31521900)

I'm more familiar with traditional retail options, but I'm confused.

I understand why the employees would want a loan - they need money to buy the shares required to exercise the loan - and I guess they can't do it through a normal broker?

If the employees Exercise-to-sell-to-cover or Exercise-to-sell they should be fine right because they would have closed the loan? This would explain why so many took the loan but so few of the layoffs were affected.

Is the only issue the ones that didn't Exercise-to-sell? I understand that tax will need to be paid but I'm not sure what benefit they'd have would be?

Unless, its because the capital gains + loan rate < income tax?

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Re:Bolt Financial's loans come due by s1artibartfast on Thursday May 26, 2022 @06:27PM (#31524054)

Bolt isn't public so there is no sale option.

You have to pay to exercise, pay taxes, and pray for a sale option some future date.

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Re:Bolt Financial's loans come due by JumpCrisscross on Friday May 27, 2022 @12:18PM (#31531344)

> Bolt isn't public so there is no sale option

Private shares are actively traded. Bolt chose to restrict its employees from being able to sell.

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Re:Bolt Financial's loans come due by throwaway92394 on Friday May 27, 2022 @04:46PM (#31534666)

Forgive me if this is a dumb question -

Assuming you're an employee with a relatively small number of shares (in terms of company control) - what's the point of shares if you can't sell them? Just _in case_ you can sell them later? Some type of dividend/profit sharing (which seems unlikely for a startup)?

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Re:Bolt Financial's loans come due by s1artibartfast on Friday May 27, 2022 @08:38PM (#31536518)

Yes, the main value is that maybe you can sell them someday.

This is why it is incredibly stupid that the IRS makes you pay taxes when you get them.

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Re:Bolt Financial's loans come due by chris11 on Thursday May 26, 2022 @02:55PM (#31522090)

It's short term capital gains vs long term.

If you don't exercise and just sell short term capital gains tax applies.

If you exercise ISOs and hold long enough you pay AMT, which can be refundable, and LTCG when you sell the shares.

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Re:Bolt Financial's loans come due by throwaway92394 on Thursday May 26, 2022 @03:02PM (#31522156)

What happens if they waive the loan? Does it count as LTCG + the income tax on the loan amount?

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Re:Bolt Financial's loans come due by chris11 on Thursday May 26, 2022 @03:46PM (#31522587)

I'm not sure what exactly would happen, but forgiven debt is usually taxable.

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