Re:Review of Thomas Piketty's Capital: Capitalism vs Democracy
by ahomescu1 on Monday April 21, 2014 @08:34PM
(#7624991)
> those shares were (and are) highly liquid.
Are they? If he tries to sell all of them, will he get exactly what they're valued at? Selling a quantity like that will probably pull the price down significantly.
Re:Review of Thomas Piketty's Capital: Capitalism vs Democracy
by mullingitover on Monday April 21, 2014 @08:52PM
(#7625065)
I'm guessing purchasing all those shares drove the price up, too. Might've been the whole point in buying up that many shares when the IPO was teetering.
Re:Review of Thomas Piketty's Capital: Capitalism vs Democracy
by ahomescu1 on Monday April 21, 2014 @09:00PM
(#7625094)
Interesting, but my guess is something else happened. Since he bought the shares at a fixed price, I assume they came directly from the company itself (how can you buy at a fixed price on a competitive market?). Since he was allowed to do this, I assume those shares were never for sale on the market, so they couldn't impact the price.
This is all guesswork though. Anyone here more knowledgeable that can jump in?
He got that tax bill by exercising his options--he bought shares at $.06 that were worth significantly more, thus giving him a great deal of taxable income. It was in the form of shares, but it was still income. To say he didn't have the money at the time is a bit dishonest--those shares were (and are) highly liquid.