Why I will not exercise my Gitlab stock options (2017)
hackernoon.comThis is a little sad. That was 1.5 million dollars of vested share for the price of $4050 + taxes.
Yeah, but those taxes are based on the value of the shares today ($1.5m) minus what it'll cost him ($4k).
Even though he's not actually profiting on that difference yet, you still usually owe taxes on it. So we're talking hundreds of thousands of dollars in taxes.
It's no small thing.
Sorry dumb question but when would he owe those taxes? At the end of the year?
LOL, no, taxes on today’s valuation are only due when you sell. And that would be very low long term capital gains tax. Albeit in this case the writer is not American so the tax situation might differ.
Would they be long term capital gains in this situation?
Why is it said if someone does not need/take money? I tend to admire people that put their values above money.
Even if I cannot follow the reasoning completely, I think it is rather sad how his time at gitlab ended.
At the end he says he'd rather invest that $4000 in his family. If I were his family, I'd be pissed he didn't take the 1.5 million.
He did not forego 1.5MM, he forewent an illiquid ${2017_Valuation}
I feel bad too. To me it seems like he was hurt by his firing and wanted to retain no connection to the company.
Never let your emotions get in the way of profit potential. It’s cold, hard math at the end of the day and you will move on.
Sad story but the author did not show sound judgement even on the way out. Very foolish to throw away money by allowing options with a significant premium expire.
For anyone else in this position, there are companies that will purchase the options immediately and give you liquidity. Yes they charge a significant fee for the service but at least you get something.
> I would even prefer to buy Bitcoins for that amount, than to invest it in GitLab.
Hope he bought the BTC!