Griping About IPOs: Too Much Upside?

After a formerly private company has gone public, new riches among employees can cause problems, as noted by a recent piece in the San Jose Mercury News (IPOs Give Companies Instant Wealth But Lots Of Headaches, Nov. 13). The article chronicles some of the distractions: excessive scrutiny of the stock price, envy among employees, or disengagement at work by the newly wealthy. Things can be even worse at companies with broadly granted stock options and restless investors (angels and/or venture capital) who do not see an opportunity to realize any liquidity from their equity grants or investment.

Not surprisingly, the article considers the need for a pre-IPO company to educate employees on the various financial-planning issues they face when the company goes public, along with quickly teaching them the rules against insider trading. At myStockOptions.com, employees and their financial advisors can find educational material on both financial planning with equity awards and the securities laws that apply to people with stock compensation.