Who knows what forces were at play here during the first day of the Uber IPO, but this bump in the middle sure looks like someone was trying to get the Uber stock out of the rut – perhaps the investment banks exercising the greenshoe option? Cue the usual pictures of two big hairy animals fighting each other.
Bloomberg reports that out of 207 million shares allocated for the IPO total, 27 million were reserved for greenshoe. I wonder how much of that was spent in the first day.
Quote 1, June 9, 2016:
I say we are going to IPO as late as humanly possible. It’ll be one day before my employees and significant others come to my office with pitchforks and torches. We will IPO the day before that. Do you get it?
Quote 2, August 30th, 2017:
In response to a question about going public, Khosrowshahi said it would probably happen in 18 to 36 months, according to two people who listened to the meeting. “It’s my opinion that the company should go public,” he said.
Of course it’s your opinion, that why you just got hired!
Looks like the IPO will happen shortly after the VC’s came to TK’s office with pitchforks. Everything else was just clowning and smear campaigning by Benchmark to depose him. Everyone who jumped onboard the righteous moralizing Uber-bashing train should be really ashamed now. HR incidents happen at any company, everyone involved in them must be prosecuted to the full extent of the law. That doesn’t excuse a ridiculous anti-PR attack that almost took down the entire company. And even now it’s not clear if Uber will fully recover.
If you are a recent midlevel Square employee, you are likely to have gotten 10k-25k RSU’s vested over 2 years. That’s about $130k-$325k pre-tax over 2 years, assuming today’s stock price. (the throwaway-authored reddit post could be completely made-up, but these numbers are not far from what I’ve seen at Uber and 3 other startups)
Folks who joined before Square introduced RSU’s (which, looks like, were issued for at least the last 2 years) likely had to pay for their stock options, and it doesn’t look pretty:
21 million options have been awarded at a value above the $13.07 closing price of Square’s stock today
“Awarded at a value above the price today” means “currently worth less than toilet paper”. Of course, those 21 mil options could have been bonuses on top of RSU’s, which would make this a bit more palatable.
If you got in a bit earlier with a strike price of $1 and an options grant of 25k, then we’re looking at $300k before tax. I have no idea what a typical options grant was in those days, again just going by what I’ve seen at 4 other startups. If you got a royal grant of 100k, then it’s closer to real money – $1.2 million before tax, but clearly that has quickly dried up in value as the strike price went up and over the current ~$13 stock price, leaving the people who joined at the later stages of the stock options program with not much.
Also worth noting is that a decent engineer with a $150k/year in salary at Square (according to Glassdoor, which unfortunately does not offer a time filter on those salaries, but let’s assume for a moment that it’s a relatively recent number) – the same engineer could probably pull $200k (or maybe even $250k) at the big 4, all things considered. That’s at least $100k extra for the 2 year period. That does not make one filthy rich, but apparently neither did the Square IPO so far.
I do believe however that it’s a viable business, and the stock price may (or may not) go up during the lock-up period significantly.
Fancy Mollusk 