Stock Option Roulette

from the games-of-chance dept

Article in Wired discusses the fact that with all the stock price swings recently, employees can have extremely different stock option packages depending on the exact date they signed on. Someone who signed on when the stock was flying may be out of the money, but another employee who signs on a few weeks later, once the stock has crashed, can be worth a ton. Once again, this is a bit of short term thinking, and the real purpose of stock options was supposed to be to make employees feel a sense of ownership, so they would work to make the stock price go up. This makes sense, though, only when there is some sort of rational reason for why stocks go up and down.

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