Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Cisco Systems, Inc. (CSCO) -- Ignore unavailable to you. Want to Upgrade?

To: Lizzie Tudor who wrote (63379)	3/17/2003 5:40:55 PM
From: Lizzie Tudor	Read Replies (2) \| Respond to of 77400

anyone here... hueyone, rkral, mindmeld, John Shannon- have an answer to this question? I am wondering how startups can IPO with options expensing as it is currently being proposed. Assuming a startup has to show profitability for 2 quarters (the old rule) I mean. I've never seen this addressed- Say you have a startup with 5 million stock options outstanding. The company is bringing in 30mm/qtr at break even, and they want to go public at say $15/share, which will equate to a valuation of 300mm. Will stock option expensing cause them to be unable to IPO would you say? Assuming the options grants are at effectively 0 (founders shares). These days, you have to be profitable to IPO. I assume there is no black scholes model for an IPO.