Comment by Galanwe
1 day ago
Absolutely not.
For RSUs companies do not purchase at exercise date, they issue new shares (or use previous buybacks).
And for stock options, the employee pays the strike, so it's even a positive cash flow.
1 day ago
Absolutely not.
For RSUs companies do not purchase at exercise date, they issue new shares (or use previous buybacks).
And for stock options, the employee pays the strike, so it's even a positive cash flow.
This is only sorta true, the total dilution from SBC is very small for most tech companies with some outliers (cough snap cough).
They may not purchase on exactly the vesting date but they certainly do offset the issued shares with buybacks. I think they can choose to reduce those buybacks without as much rigamarole as they'd need to issue new shares for funding, so they can effectively used that as a "back door" way to raise money. I think it might juice their P&L a little too, but I doubt that's why they do it.
In the past Facebook bought back enough shares to cover RSU's. Their AI spend has changed this.