Re: How many worthless stock options do yo

[Sabahat Ashraf <sabahat -at- viragelogic -dot- com>]

All the folks have said a lot very, very good things. So why am I still
speak? Well, it's late Friday afternoon, the traffic won't clear for
another hour or two, and I am low on sleep. So here goes:

Marilynne Smith wrote:

> At 03:50 PM 9/21/2001 -0700, Janice Gelb wrote:
> >david -dot- locke -at- amd -dot- com writes:
> > >Maggie said:
> > >
> > >|It's an opportunity to spend your own money to fund their company which
> > >pays >you your money, to...  It isn't money.  I'd just as soon go to Vegas.
> > >
> > >Here in Austin, back during the dot com boom, stores would take stock
> > >options. It was nuts.

... and car dealers, ... and estate agents, and ... nucking futs!

> >What was *really* nuts was that at least in the SF Bay area, some
> >mortgage companies structured mortgages that counted people's
> >stock options as if cashing them were part of their regular income.
> >When the stocks came crashing down, not only were the people's
> >"savings" gone, but they didn't even have enough monthly
> >income to cover their mortgage payments.
> 
> That _is_ crazy!  Stock options are like believing in Santa Claus.  Once in
> a while something happens to justify your faith in holding them.  The rest
> of the time they're like a fairy tale.  You have high hopes, but you've got
> nothing you can put in your pocket.

Actually the financial vehicles known as Santa, the tooth fairy, etc.
often *do* result in something in your pocket or stocking or other
<object of greed>-holder.

Though, folks, there *are* people for whom options are more'n some will
o' the wisp. I can count several people that *are* worth several million
-- even after the fall -- due to those things. And there's a whole city
of them down here in the Valley; it's called, variously, Tasman Drive,
or Cisco City, or The City of Cisco. And there is one guy I have heard
of that works at a dotCom [yes, in this day and age] and has *paid* for
the options that have vested. So it was about 15 cents per, but it was
still real money out of his pocket. And that comp...,sorry, dotCom ;)
now has about 3 months of capital to burn before it has to execute some
sort of end game.

The serious point being that, the way the game is played when it is
played, as in when your company is going up, up, up, up, or when the
market comes crashing down [excuse the inappropriate metaphor, I cringe
as I write this] options are very real instruments of wealth. It just
varies by industry, time, and space. When I worked for an EDA
[Electronic Design Automation, see http://www.edac.org] company in New
Jersey, I had barely heard of stock options. Then I worked for Cisco
Systems and options are what the *whole* corporate culture is based on.
[no kidding; what you are payed, what your performance is, ...
everything] Now I work for a just-gone-public EDA company [no, I joined
after they went public] in the post-dotCom era and options are, well, as
Marilynne said, kinda like Santa when you are not quite sure your
parents have caught up to the fact that you've seen thru the fable and
wonder whether they will still come thru with the present.

One thing to note: when we think "option" we think technology, or
computer/IT technology. I have folks from totally different fields [like
biochemistry] who work for start-ups, get options, get vested... the
whole nine yards. So just because one part of the economy is souring on
stock options doesn't mean they might not be really useful at the same
point in time in another, totally unrelated sphere.

One more thing; being an owner *does* make things different. Except
where the dotBoss uses it as an excuse to lowball you on the real
money... but Friday evening is no time to be uncharitable. And I tell
ya, them's wise words David spake, when he said:

"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."

However, when he says:

"...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..."

... I got a couple of big but's to throw in. Firstly, like I said, all
that cool juju [the adopter and the horizontal ... tut-tut, Friday
evening is no time to get racy, either] might be bust in one corporate
sphere but still happening in another; so "the mass adoption of the
Internet" might be the only way to make some dough from options for a
tech writer. We do, after all, work in all sorts of companies. Defense
contractors might suddenly become where the money is -- 200 dollar
toilet seats anyone?

Secondly, I personally have never been in a situation where I had
anything that was vested and worth something. But from what I hear,
cashing in and doing what you want to do in life [pay off a mortgage,
build a jacuzzi, go hiking in Nepal (whatever you do, just don't turn
left at Diego Garcia for the next 3-5 years ;) hey! I can make that
joke, I *am* Pakistani) etc.] always wins over waiting around till... I
don't even want to go there.

My tuppence 'orth.

Sabahat.

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

A landmark hotel, one of America's most beautiful cities, and 
three and a half days of immersion in the state of the art:
IPCC 01, Oct. 24-27 in Santa Fe.  http://ieeepcs.org/2001/

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