Employee stock options reverse split
It can be hard when you work at a company that has given you 10,000 stock option shares at $0.20 per share strike price to find out that, as a result of the IPO, the really have 500 stock options shares at a price of $4.00. Reverse stock split: A reverse split results in the reduction of outstanding shares and an increase in the price of the underlying security. The holder of an option contract will have the same number of contracts with an increase in strike price based on the reverse split value. The option contract will now represent a reduced number of shares Basics of Employee Stock Options and How to Exercise Them An employee stock option (ESO) is a privately awarded call option, given to corporate employees as an incentive for improving a company’s market value, which cannot be traded on the open market.