I do believe there was a second as well, but I am not going to do your homework for you. This was the first hit on Google: "red hat" stock split.
As for options, the whole point is that the option price is less than the stock price - or else it would be much of an incentive, now would it? He had the option to buy Red Hat shares at about a buck, which, as you so astutely point out, is below the lowest price that Red Hat has ever traded.
As for the amount of options, yes, if you get in on the ground floor, you can get "HALF A MILLION DOLLARS" in stock options. Of course, since the company will be about five people at that point and have zero revenue, they are not worth much, and in today's climate, they are not likely to be worth much - ever. But some people get lucky.
In the future, before you go shooting your mouth off anonymously in public forums, take a second to do the most basic research. I'll get you started. When companies want to go public, they have to file an ownership statement called an "S-1". These have to be public record, and that record is kept on the Edgar system of the SEC. Pick a few of your favorite companies and check it out. I make learning fun!
Options are really worth it if you are in on the ground floor. I have a neighbor who was one of the early Red Hat employees. From Edgar it looks like he had ~500,000 options at about a buck. Considering they split twice, he was looking at ~2,000,000 options at about a quarter each. He's retired now.
My case was different. I was a grunt in a company that went public. I was granted 6000 options at US$4/share, to vest over four years. On my first year anniversary, I had 1500 shares and the stock price was US$44/share. Now, while my boss (who had over 144,000 options) was driving a new Porsche, I was not going to retire on ~US$60K, so I decided to exercise my options, yet hold on to the stock for the long term capital gains (keep it a year, pay less taxes).
A year later the stock was less than US$4 a share. Also, there is this thing called the Alternative Minimum Tax (AMT). Imagine my surprise when TurboTax told me that the government acts as if I had actually made US$60K that day, and it wanted its share: US$20K.
Yes, I am an idiot. Yes, I lost my shirt.
The moral? These days, options aren't that valuable unless you have lots of them. Also, exercise them as soon as you can.
What's funny is that senior executives are now refusing stock options and asking instead for preferred stock. Preferred stock pays high dividends. Under the new rules, dividends are not taxable as income. Go figure.
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Uh, here is at least one of the splits.
I do believe there was a second as well, but I am not going to do your homework for you. This was the first hit on Google: "red hat" stock split.
As for options, the whole point is that the option price is less than the stock price - or else it would be much of an incentive, now would it? He had the option to buy Red Hat shares at about a buck, which, as you so astutely point out, is below the lowest price that Red Hat has ever traded.
As for the amount of options, yes, if you get in on the ground floor, you can get "HALF A MILLION DOLLARS" in stock options. Of course, since the company will be about five people at that point and have zero revenue, they are not worth much, and in today's climate, they are not likely to be worth much - ever. But some people get lucky.
In the future, before you go shooting your mouth off anonymously in public forums, take a second to do the most basic research. I'll get you started. When companies want to go public, they have to file an ownership statement called an "S-1". These have to be public record, and that record is kept on the Edgar system of the SEC. Pick a few of your favorite companies and check it out. I make learning fun!
Okay, here is my take.
Options are really worth it if you are in on the ground floor. I have a neighbor who was one of the early Red Hat employees. From Edgar it looks like he had ~500,000 options at about a buck. Considering they split twice, he was looking at ~2,000,000 options at about a quarter each. He's retired now.
My case was different. I was a grunt in a company that went public. I was granted 6000 options at US$4/share, to vest over four years. On my first year anniversary, I had 1500 shares and the stock price was US$44/share. Now, while my boss (who had over 144,000 options) was driving a new Porsche, I was not going to retire on ~US$60K, so I decided to exercise my options, yet hold on to the stock for the long term capital gains (keep it a year, pay less taxes).
A year later the stock was less than US$4 a share. Also, there is this thing called the Alternative Minimum Tax (AMT). Imagine my surprise when TurboTax told me that the government acts as if I had actually made US$60K that day, and it wanted its share: US$20K.
Yes, I am an idiot. Yes, I lost my shirt.
The moral? These days, options aren't that valuable unless you have lots of them. Also, exercise them as soon as you can.
What's funny is that senior executives are now refusing stock options and asking instead for preferred stock. Preferred stock pays high dividends. Under the new rules, dividends are not taxable as income. Go figure.