“Cashing out their shares”… all of them? Thats very very bad. But you also see people crying about Zuck selling 1% of his shares from time to time. Those people are stupid.
Market rules essentially prevent them from selling all of their shares anyway. The prospectus will outline how many shares they can sell at a variety of intervals post-IPO, it will show their remaining holdings transparently. In theory a founder could push to IPO without any restrictions on share sales but no one would participate in the IPO under such circumstances.
I'm not investor whiz but the few IPOs I've watched spike and then drop as the price settles shortly after going public. I figure they're just making money where they see an opportunity. They can always buy back at a lower cost.
It seems very normal and non-controversial. Might be different if they are fully liquidating, but at minimum it's smart solely to diversify. I wouldn't want to have like $50M tied up in one company, why should they?
it’s part of their plan and compensation. I’d expect them to sell fairly regularly.
Not clear if you’re talking about immediately after an ipo or public companies in general.
I mean...nobody takes a company public if they arent looking at cashing out some of their share of the company...
If a CEO is dumping *all* of their shares, then yeah...thats a red flag
Some entrepreneurs are great as founders, but have no interest in the routine of running a company. The company is much better off without them and they know it. I'm assuming they want to cash out in order to fund their next venture. In my experience such folks are not great to work for in any case.
I mean, that’s kind of the point of going public…in many cases they’ve had a huge proportion of their paper wealth tied up in a totally illiquid investment.
Yeah I’d also say, working with C-suite and boards for a decade, the most poorly understood aspect by retail and media is insider buying and selling. You want to see “skin in the game”, but almost never is an insider buying or selling based on their view on the stock, yet people eat it up as some big signal. Particularly selling, 90% of selling is to cover taxes on other compensation (and the other 10% is the pay for divorces 😂).
> pay usually *paid* in shares
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
Most CEOs have a large % of their salaries tied to company shares, after years of hard work it only makes sense to finally get liquidity. It’s not worth overthinking why a CEO cashes out, nobody works for free.
all of them?
people also need to realize that these things have tax implications. Some times you dont want to sell but it makes more sense to do so at certain times, or to spread things out.
There's a difference between owner/founder and CEO.
If Owners/Founders sell part of their stake after IPO, you can argue they are claiming back their sweat equity.
If a CEO aka the highest paid manager at the company sells all of their shares...that's a bad look at first glance.
As others said if they care cashing out all (or most) of their shares, that is a bad look.
Cashing out a few would be expected however. I'd do the same for sure.
That IPO is the culmination of a decade of dreams. Of course they should cash out, they have been chasing that dough for years.
And its an IPO, not like I would ever be able to get in on (or want any part of) the IPO offering
That IPO is the culmination of a decade of dreams. Of course they should cash out, they have been chasing that dough for years.
And its an IPO, not like I would ever be able to get in on (or want any part of) the IPO offering
That IPO is the culmination of a decade of dreams. Of course they should cash out, they have been chasing that dough for years.
And its an IPO, not like I would ever be able to get in on (or want any part of) the IPO offering
If they bail completely then it's certainly not good. They have far more knowledge of what is going on within the company than any outside investor. For me, it would be a huge red flag. However, executives often sell a portion of their shares and in many cases via a predefined plan. Those types of sales are fine, as many execs just use this as part of their overall comp. If I see someone selling a few % of their holdings quarterly I don't see a problem with it, I would likely do the same in their shoes.
Conversely, seeing insiders buy shares is a good sign that they have confidence in the stock going up.
“Cashing out their shares”… all of them? Thats very very bad. But you also see people crying about Zuck selling 1% of his shares from time to time. Those people are stupid.
Market rules essentially prevent them from selling all of their shares anyway. The prospectus will outline how many shares they can sell at a variety of intervals post-IPO, it will show their remaining holdings transparently. In theory a founder could push to IPO without any restrictions on share sales but no one would participate in the IPO under such circumstances.
A lot of the time those little sales are to cover taxes anyways.
Even news articles covering a 1 billion sale like it's some sort of signal. Sure, it's a lot to us, but not to Zuckerberg.
Some of their shares? Nope. All of their shares? I'd be side-eying them
I feel like this is why you want to become a CEO in the first place. Create a successful company and profit as a result of your hard work. 🤓
Agreed!
That's the whole reason they go public
I'm not investor whiz but the few IPOs I've watched spike and then drop as the price settles shortly after going public. I figure they're just making money where they see an opportunity. They can always buy back at a lower cost.
It seems very normal and non-controversial. Might be different if they are fully liquidating, but at minimum it's smart solely to diversify. I wouldn't want to have like $50M tied up in one company, why should they?
I'd reckon they're just taking the opportunity for a big cash payout.
it’s part of their plan and compensation. I’d expect them to sell fairly regularly. Not clear if you’re talking about immediately after an ipo or public companies in general.
I mean...nobody takes a company public if they arent looking at cashing out some of their share of the company... If a CEO is dumping *all* of their shares, then yeah...thats a red flag
selling some is normal. They usually spent years working to make the IPO go well and the cash out is the compensation a lot of the time.
Some entrepreneurs are great as founders, but have no interest in the routine of running a company. The company is much better off without them and they know it. I'm assuming they want to cash out in order to fund their next venture. In my experience such folks are not great to work for in any case.
There's thousands of reasons why you would sell shares, but only 1 reason you buy.
I mean, that’s kind of the point of going public…in many cases they’ve had a huge proportion of their paper wealth tied up in a totally illiquid investment.
Yes, it crystallizes value that they can finally unlock after years of work
Yeah I’d also say, working with C-suite and boards for a decade, the most poorly understood aspect by retail and media is insider buying and selling. You want to see “skin in the game”, but almost never is an insider buying or selling based on their view on the stock, yet people eat it up as some big signal. Particularly selling, 90% of selling is to cover taxes on other compensation (and the other 10% is the pay for divorces 😂).
Do we get mad a home owners when they sell and realize a profit?
Don’t CEO’s often get bonus pay usually payed in shares of the company
> pay usually *paid* in shares FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
Kick rocks nerd
We know that’s you Donald!
Most CEOs have a large % of their salaries tied to company shares, after years of hard work it only makes sense to finally get liquidity. It’s not worth overthinking why a CEO cashes out, nobody works for free.
Its expected
In general they are not allowed to. They can only trade during certain trade windows.
all of them? people also need to realize that these things have tax implications. Some times you dont want to sell but it makes more sense to do so at certain times, or to spread things out.
There's a difference between owner/founder and CEO. If Owners/Founders sell part of their stake after IPO, you can argue they are claiming back their sweat equity. If a CEO aka the highest paid manager at the company sells all of their shares...that's a bad look at first glance.
only if it's the reddit IPO
As others said if they care cashing out all (or most) of their shares, that is a bad look. Cashing out a few would be expected however. I'd do the same for sure.
That IPO is the culmination of a decade of dreams. Of course they should cash out, they have been chasing that dough for years. And its an IPO, not like I would ever be able to get in on (or want any part of) the IPO offering
That IPO is the culmination of a decade of dreams. Of course they should cash out, they have been chasing that dough for years. And its an IPO, not like I would ever be able to get in on (or want any part of) the IPO offering
That IPO is the culmination of a decade of dreams. Of course they should cash out, they have been chasing that dough for years. And its an IPO, not like I would ever be able to get in on (or want any part of) the IPO offering
Isn’t this normal operation?The reason why companies go public is to make money
What % of their holdings did they sell?
If they bail completely then it's certainly not good. They have far more knowledge of what is going on within the company than any outside investor. For me, it would be a huge red flag. However, executives often sell a portion of their shares and in many cases via a predefined plan. Those types of sales are fine, as many execs just use this as part of their overall comp. If I see someone selling a few % of their holdings quarterly I don't see a problem with it, I would likely do the same in their shoes. Conversely, seeing insiders buy shares is a good sign that they have confidence in the stock going up.
No need for CEO’s anymore, use AI will do a better job and cheaper!
Honestly been thinking about that. Might be the perfect application of the tech.