Do employee stock options in private companies have value?
September 21, 2011
Date: Tue, 14 Oct 2008
Does a company stock option ever have any value unless the company goes public?
My sister and brother-in-law are bragging he will be a millionaire three times over because he received stock options for a solar panel manufacturing plant that he works for. They haven’t opened for business yet, haven’t earned a penny, and the biggest contract for the company is from the CEO’s brother in Taiwan.
Date: 7 Nov 2008
Yes, stock options often have value before a company goes public. I have a client who works for a company that has technology that venture capitalists and potential acquirers are very excited about. Even though the company “has never made a penny,” his options are potentially very valuable.
These days, most employees of private companies are cashing out their options when their companies are bought out by another company.
Time will tell what will happen for your brother-in-law. He could end up with a fortune or with nothing.
Meanwhile, try not to be irritated with your family members.