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Comment by yellow_lead | Hacker News Reader

Had to check the numbers. IPO at $80 and sold to IBM for $35.

Not great for investors, but insiders benefitted a lot!

Depends how you define insider. Employees were subject to a 6 month lockup and during that time the price dropped dramatically, but they still had to pay taxes on the $80 IPO price. Execs and institutional investors that were able to sell at IPO made out quite well though.

Execs are employees, were they really exempt from the lockout? Seems unethical.

thats preferred stock baby. Startups still a scam to work for.

There are always haves and have-nots, lol. “Tech” isn’t exempted.

Nearly certainly they were not. Any stock holder would be blacked out including existing investors.

That’s simply not true. You can look at the SEC filings and see exactly who was able to liquidate during the IPO.

I’m not passing judgment as to whether that’s “good” or “bad.” It simply is.

Too bad you can't sell the option to buy your shares the day you get them at whatever price you want :/

> they still had to pay taxes on the $80 IPO price

They will get capital losses.

That's not perfect.

It's really not. Let me know if you find any lenders that will let me pay off a mortgage with a capital loss.

At least in the startup narrative that circulates on HN, most early employees at a company with that kind of IPO would hope to have a lottery like level of financial windfall. Now their upside is if they manage to get luck a second time they get to offset their winnings? :/

> Let me know if you find any lenders that will let me pay off a mortgage with a capital loss.

I don't.

But the IRS will let you pay your taxes that way.

It obviously depends how much equity vs income you're talking about.

IPOs became exits in 2008. They’re no longer about raising capital

Google was profitable when it went public in 2004. But yeah, no longer about raising capital.

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