Re:Hard-won lessons about money and investing
by mcfunley on Sunday November 30, 2014 @09:18AM
(#8676856)
Exactly--a company I worked for did a stock split that was at least partially rationalized by being able to offer candidates higher share counts. Companies also hand out explainer sheets with their grants that don't really help, inasmuch as they seem to be intended to get you excited about the value of the shares disregarding the exercise price (and the fact that in most scenarios, you're paying normal tax rates on what's left).
It can be dense reading, but no one cares about your money more than you do, so it's your responsibility to make sure you understand what's going on. Doing that research saved me making more mistakes down the road.
Another common mistake with pre-IPO companies is to say "Wow, I get X thousand options!!" But you have to ask how many outstanding shares the company has. What really matters is what percentage of the company (your shares divided by total outstanding shares) is being offered to you.