RE: How many worthless stock options do you have?

[david -dot- locke -at- amd -dot- com]

I know that the last time my company split, I was really proud of what we
had done. All the people that had come into the company since the previous
split finally got rewarded for a job well done. 

Of course, there was that day when a fairly recent employee asked me how I
was doing. Our stock had just entered the its free fall, because we missed a
quarter, not the general dot com bust. I said I was fine. I lost about
$200,000 in the value of my next vest that was two weeks away. She burst out
in anger. A few days later she quit. 

I just parked my dreams. I quit as well, but I was going to do that
regardless of the stock price and had planned to do it once I got my money
from my vest. Everyone said, why not just hold the stock. Well, I needed the
money, because I was relocating, and there were a few bills and attorneys to
pay, and a years worth of books that had accumulated on my wish list. The
stock never went back up. 

In a stock option compensated company, you do get a culture of ownership. I
owned my piece of the world. My issues had to be resolves with the resources
I could get to help me. Nothing could be delegated upward, downward, or
sideways. Being an owner changes the way you see thing. 

One thing to look for in a company that will IPO is does it act like a
public company. A Harvard Business Journal article found that if a company
doesn't act like a public company before it IPOs it will under perform its
IPO price within a year or two. How does a company act like a public
company? Well, they stop being revenue focused for one, and think in terms
of growing their market. If marketing isn't working, the stock will under
perform. Selling isn't marketing. And, revenues today isn't as interesting
as potential revenues tomorrow. Nor can you layoff or cost control your way
to wealth.

The dot com bubble has burst. Somehow dot coms were considered software
companies rather than competitors in their segment. How that happened I
don't know, but software companies are suffering collateral damage. For now
we are returning to a cash cow economy. There is no way of knowing when the
wealth creation economy will return. It will return when ideas can find
cash. The eventuality is that dot coms will be back after the early adopter
stage when a horizontal product can be found to drive the mass adoption of
the Internet. It will be a while. Be patient. Take the options. And, go with
good luck.

David


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