Have you ever made money with stock options?

[mb]

Deleted

 

[Rambler]

Over the years received about 150,000 options. The first dribbles didn't make me much money but helped. The big grant I received was performing nicely unti June 2007. In the spring and up to June of '07 I exercised about 30k options which produced about a million pre-tax. I was going to exercise them all, but got greedy, and left 30k options on the table at the end of June when our blackout started. They were worth a million at the time, pretax. After the blackout ended, they had dropped so much that I wanted to wait and see if they recovered a little. By the time the next blackout ended, they were under water, and they are still under water. Lessons learned? 1) Don't get too greedy, and 2) don't allow too much of your personal fortune and your career be wrapped up in the same company, 3) Diversify!

R

 

[youbet]

I retired mid-2006 with a stack-o-options nicely in the money and about 3 yrs to exercise them. I didn't excercise that year because I figured those, coupled with severance pay, would have put my total income in a painful fed tax situation. At the beginning of the next year, the stock price started to fall and even though the options were still in the money, I thought I'd wait for it to recover. It never did and, in fact, fell like a rock. Now the options are due to expire shortly, deep under water with no hope of recovery in time. Sure glad I saved paying those taxes!

I did do OK with options the last decade of so of my wo*king life. A few new cars worth or so.....

 

[FIREd]

Sorry, everyone, I forgot the "underwater" option in the poll. I don't know how to fix it.

Company #1: 20,000 options. Start-up biotech company, planning on going public in 2002. Great product, in beta testing, 1 year from market (and actual revenues). Then the 2001-2002 recession hit us hard. Venture capital dried up and we couldn't find investors willing to extend bridge financing until the company went public. Despite the DOD grant I received for my project, the company had to declare bankruptcy in 2002. So 20,000 options = $0.

Company #2: 65,000 options. Start up biotech, great product concept, but never came close enough to an actual product. Planned on going public in 2002, postponed IPO due to bad market conditions, but made a juicy partnering deal with a giant pharmaceutical company instead. Things looked golden until our big pharma friend unilaterally and unexpectedly broke the partnership. The company scrambled to seek alternative capital injections but never recovered. Investor money finally dried up and the company declared bankruptcy in 2005. So 65,000 option = $0.

Company #3: 100,000+ options. Mid-sized biotech company, already public, but we got in at a time when the stock price was peaking. We have been chasing the stock down ever since: every time we get a new grant, the stock goes down further. So 100,000+ options =$0 (all under water) for now. But the silver lining is that the vast majority of these options have been granted in the last 12 months and their strike price is quite low. So there is hope. Hopefully, the stock market will start recovering before the options expire and we can manage to keep our current jobs long enough to cash in.

I was starting to feel like stock options were a fool's game... But it appears that most people who have been granted stock options during their careers did manage to make some money, maybe not fortunes but at least a few grands. It's encouraging!

And I picked up a few good tips on this thread too! Thanks!

 

[Ed_The_Gypsy]

Remember ENRON!

 

[Charlotte]

A year and a half ago, my accumulated options from Mega were worth more than $300K. They're currently worth nothing... with only 2-3 more years until they'll start expiring. I've always wondered whether to count them in my net worth or not (now I know not to count my chickens before they hatch...).

Charlotte

 

[FIREd]

I've always wondered whether to count them in my net worth or not (now I know not to count my chickens before they hatch...).

That's a good point. I have decided that , when my options are finally worth something, I won't include them in my net worth until I actually cash them in. Our company stock is so volatile that it would really screw up my net worth calculation month-to-month and make it much harder to track our actual progress.

 

[kumquat]

I've always wondered whether to count them in my net worth or not (now I know not to count my chickens before they hatch...).

Charlotte

I have about 30% of my NW in vested but un-exercised options. Since I can sell them if I want, I count the potential gain as part of NW. Not to count them would mean that I shouldn't count the present value of my other holdings as they could also drop to zero.

I don't count the value of options not yet vested.

 

[W2R]

Interesting that so far, with 54 votes, 76% of those responding have had stock options.

 

[deserat]

I have a question - has anyone taken options or stock in lieu of payment as a consultant? I've been told the tax ramifications are different from being a non-employee in that one must pay the taxes right off the bat. I've been offered immediate full vesting of stock options worth 1.5% of the company---I've done some research - I know it's a crap shoot, but hey, I'm still getting paid something in addition. Comments are welcome

 

[Helen]

I've never made money on stocks, let alone options.

 

[ziggy29]

Interesting that so far, with 54 votes, 76% of those responding have had stock options.

Hey, I worked as a techie in Silicon Valley in the bubble days. It was a requirement...