My friend Mike was an early employee at #McLeodUSA. At one point he had stock options worth hundreds of thousands of dollars. He participated in the company's stock purchase program so in addition to the shares he received as an employee, he was using his personal funds to buy more. At its peak McLeodUSA was valued over $20 billion and most employees felt like Mike #DrankTheKoolAid that #ClarkMcLeod was serving them.
Unfortunately for Mike, the #telecom boom of the 1990's became a casualty of the #dotcom bubble bursting in 2000. Very quickly share prices fell and very few employees sold in time to make their stock options worth anything and eventually the company filed for #bankruptcy and most employees, including Mike, lost their jobs.
Mike went on to for #YellowBook. I will spare you the details. Ask a 20 year old what a phone book is... My reason for writing this... What if Mike had chosen to hedge his bets and shorted the company he was working for? If McLeodUSA went to the moon Mike is rich on his stock options. If McLeodUSA goes belly up he gets rich because he was smart enough to short it.
I'm not sure if shorting your employer is a good strategy but I am equally not sure if it is not a bad strategy.
#StockOptions #Employer
No comments:
Post a Comment