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Comment by nchuhoai | Hacker News Reader

Mark Cuban's Response to http://dealbook.nytimes.com/2012/09/03/david-ebersman-the-ma...

Like always, love his rationale and thinking. I never understood people's view that facebook needs to be obsessed with the stock price (apart from the mentioned employee options). That might just be the naive youngen in me, but what facebook should, and in my opinion does care bout is its product line and users.

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You are partly right, but in Facebook's case the stock price is important for a few reasons: (1) public perception: FB is a media/advertisement related company, and it is not good to be viewed by the public as a sinking ship; (2) employee retention: tech companies rely on stock grants to attract talent. With a stock price that is getting lower by the day, there is less incentive for employees to join the company.

Stock grants were the last thing that attracted me to my position at Facebook. Their other benefits, and especially the workplace environment itself [1], are far more desirable to me than stock grants, especially when the salary range is already extremely competitive.

1: https://www.facebook.com/careers

(1) So your advice would be to cancel my (potential) very effective marketing campaign in FB because it's stock is sinking? Or should I reduce my personal activity? Or what?

No, but people without any successful campaigns (they either never have had a FB marketing campaign or their last one failed) will get doubts about if FB is the right venue. I personally think stock price is a bad proxy, but many people still look at it.

Agreed on (1), non-tech people continously reference the stock price totally unrelated (sigh), but for (2), they have 10 billion more to pay, right :)

They raised $3 million per employee. They have plenty of ability to offer the very best kind of compensation - cold, hard cash.

The reason tech companies rely heavily on stock-based incentives is to align the interests of the employee with the shareholder. You want the group to have a shared fate. Cold, hard cash, while attractive to people who haven't yet joined, doesn't align interests as well as stock does.

They can always take the upthread suggestion of repricing options, or issuing RSU.

I'm really not seeing any employee downside other than some punctured dreams - and I don't see how those dreams would have been any less punctured if they had IPO'd at $10 and moved to $18.

Employees would have negotiated for more shares at the $10 price.

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