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Googlers to Auction Stock Options

By - December 14, 2006

Yesterday, Google announced an innovative program, called the Transferable Stock Option (TSO), to allow employees to auction off their eligible stock options to financial institutions.

Morgan Stanley will coordinate the auctioning in TSO, which will take effect the second quarter of 2007. Only options issued after Google went public are eligible and Google’s Executive Management Group will be excluded from participation. Options transfered under the TSO will be valid for two years or at the conclusion set in the original grant terms, which ever is first.

Henry Blodget asks: If anyone has figured out the drawbacks of Google’s new transferable option plan, please weigh in, because at first glance it looks like a win all around. (Which begs the question: Why haven’t other companies done this? Why does Google seem to be the only Valley company dead-set on innovating?)

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  • http://sethf.com/ Seth Finkelstein

    Extremely ironic question coming from Mr. Bubble 1.0 himself (Henry Blodget)

    Drawbacks? If you’re Google and the employees, none. If you’re a stock investor or one of the buyer suckers who gets burned, well, who cares about you?

    See my blog for some skeptical analysis.

    Disclaimer: I’m a programmer, not a professor of finance. But I haven’t seen much beyond hype-hype-hype in the reporting.

  • JG

    Blodget writes: “Which begs the question: Why haven’t other companies done this?

    This is a very minor point, but it is a personal pet peeve. It does not “beg the question”. It “raises the question”. Or perhaps it even “calls out, imploringly (as would a beggar), for the question to be asked”.

    But to “beg the question” means to use circular logic or circular reasoning in an argument.

    Then again, maybe this supposed “innovation” really does beg the question: I.e. if it is innovative, then Google will do it; and Google does it, therefore it must be innovative ;-) Ah, what hidden meanings are you trying to make clear to us, Mr. Blodget? ;-)

  • http://www.homebusinesscents.com Keith Cash

    The question is the answer, Why are other companies not doing it. Just a guess here, Maybe it not considered proper. or the employees do not want to pertisipate