Question about stock options.

[slycat]

Lets say i'm fully vested(4yrs) for my options and i wanna buy them. We're not public but lets say i wanna gamble and buy them before i quit my job. Can they make up whatever they want for the price per stock? So if they wanna be an ass and charge me $5/stock they can?...or is there a regulation or they have to get it evaluated etc.

We have no CFO or even full time accountant so i can't even ask anyone.

 

[DaveSimmons]

Your options were given a "strike price" at the time they were issued. That is all you have to pay. Check your paperwork from the time they were issued.


(That's how options work. You're given the right to buy X shares at price $Y. The idea is that you'll work hard to drive the value of shares up much higher than $Y, so you can "exercise" the options by instantly buying them at $Y and selling them for $Z, keeping the difference between the two)

 

[slycat]

i read my paperwork it only said the amt of stock i would get, no pricing whatsoever.

 

[sandmanwake]

I'll give you $1. That's one more dollar than you might get otherwise.

 

[DaveSimmons]

Originally posted by: slycat
i read my paperwork it only said the amt of stock i would get, no pricing whatsoever.

Then are they options to buy shares, or are they actually shares that you now fully own?

Your paperwork has to say.

If they are just shares, you own them. You don't have to pay anything.

 

[torpid]

I don't get it. Are you saying you can exercise your option to buy the stocks now but you wouldn't actually get any until it went public? Or what?

 

[AccruedExpenditure]

Originally posted by: DaveSimmons
Your options were given a "strike price" at the time they were issued. That is all you have to pay. Check your paperwork from the time they were issued.


(That's how options work. You're given the right to buy X shares at price $Y. The idea is that you'll work hard to drive the value of shares up much higher than $Y, so you can "exercise" the options by instantly buying them at $Y and selling them for $Z, keeping the difference between the two)

That the maximum he has to pay. But whose to say his companies shares are worth more than the printed derative strike price... being a privately held company, their probably not worth their strike price.

Who ever is in charge of your books can get you a valuation for the firm as a whole. Using this information and information about number of shares outstanding an accountant can determine the price of a share of your company. If the valuation of this share is less than the strike price of the option you exercise your option at the stock price instead of the strike price
What line of work is this company engaged in?

 

[slycat]

we're kinda an asp(app service provider)...and i'm the network/IT.

 

[slycat]

Originally posted by: torpid
I don't get it. Are you saying you can exercise your option to buy the stocks now but you wouldn't actually get any until it went public? Or what?

i'm unsure myself how this works but i think u buy and they are yours but they're worth grass till it or if it goes public.

 

[AccruedExpenditure]

Originally posted by: slycat
we're kinda an asp(app service provider)...and i'm the network/IT.

Hmmm, sounds too nichy to me... Does your contract nulify your options if you leave the company? If not, it probably makes more sense to hold on to the options instead of exercising them now...

How big is the company?

 

[slycat]

Originally posted by: AccruedExpenditure

Originally posted by: slycat
we're kinda an asp(app service provider)...and i'm the network/IT.

Hmmm, sounds too nichy to me... Does your contract nulify your options if you leave the company? If not, it probably makes more sense to hold on to the options instead of exercising them now...

How big is the company?

i'm gonna re-read that note when i get home but what if it had nothing about 'nullified options' and such?...it was typed up by some office admin at that time and she was clearly not an acct type and so the wording is really basic.

company is still small...like 15persons but we're kinda leaders in a very large mkt segment. Thats why i said ...if i wanna gamble and buy 'em before leaving the co.