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Hearing a lot of stories from friends who lost their money in the recent IPOs.
PSA to hire your own lawyer and financial advisor to understand how to protect your downside, and what options are available to you.
Do not rely on belief that the company has you covered.
PSA to hire your own lawyer and financial advisor to understand how to protect your downside, and what options are available to you.
Do not rely on belief that the company has you covered.
Things to ask your company & lawyer:
- Are they covering my tax bill at the IPO price in the conversion?
- What is the policy for using derivatives to cover my exposure? Particularly, am I considered an officer of the company, and would this be viewed as insider trading?
- Are they covering my tax bill at the IPO price in the conversion?
- What is the policy for using derivatives to cover my exposure? Particularly, am I considered an officer of the company, and would this be viewed as insider trading?
If the company is not covering your tax bill at the time of conversion to public stock
- Ask the leadership team for a tender offer prior to the IPO
- Ask your financial advisor & lawyer if it is legal for you to purchase options.
- Ask the leadership team for a tender offer prior to the IPO
- Ask your financial advisor & lawyer if it is legal for you to purchase options.
If, according to your standing in the company and the terms of your contract & SEC guidelines, it is legal
an example strategy --
after the IPO, buy a put option at the IPO price in an amount whereby if the stock goes down 50%, the option will pay for the losses in your stock.
an example strategy --
after the IPO, buy a put option at the IPO price in an amount whereby if the stock goes down 50%, the option will pay for the losses in your stock.
A good primer on what to ask your lawyer, CPA, and financial advisor about leading up to an IPO.
https://www.amafinance.org/ipo/hedging/basics/
https://www.amafinance.org/ipo/hedging/basics/
The situation mainly discussed by this thread --
(1/2)
(1/2)
don’t really agree with the framing unless they violated the contract terms, but looks like employees are suing; root cause discussed above in this thread. https://link.medium.com/lWuFtYTIb8
