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In response to
"IPOll: if you're a Facebook employee with stock option(s), how soon after the IPO do you cash them bitches in?"
by
encyclopedia pixie
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180 days = SEC wait period
Posted by
hellokitty
Feb 1 '12, 21:10
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6 months is the minimum time to wait before any 'insider' is allowed to sell - as per S.E.C. regulations. Not only that, there are the usual black out periods that an insider cannot sell, how much you're allowed to dump in a calendar month, etc etc.
If they are options, they still need to cough up the money to buy the options in the first place (hence the name), and then you need to pay tax on them. It's not free/easy money, but under ideal conditions it's pretty nice. Example under Canadian law:
10k stock @ $1 option, will cost you $10,000. You then sell all 10k stock @ $5, $50k total gross return. You pay tax on the difference $5-$1 x 10k = $40,000 is now added to your yearly salary since it is capital gains.. pay up @ your now current tax rate.. 40%? You have an additional $16,000 tax bill for that year. There are a few special cases where you can defer or avoid some tax, but this is a good starting point. Instead of 50k you made 34k. still great, but keeping it a little more real.
I won't get into the dot-com risks of exercising options, and then a stock market crashes and you can't sell... or you sell for less than the fair market value compared to when you exercised.
As for is facebook IPO going to be better than Zynga IPO? Hell yes.
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