Mogujie.Com'S Listed Employees Encounter A Dream Moment

Many years of waiting for the company to go public, and holding the option to get rich overnight is the dream of many startups.

The reality is not always satisfactory. Recently, it has just been listed on the US stock market.

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Employees encountered a dream moment.

According to the world clothing and shoe net, mogujie.com was listed on the NYSE in December 6th. Then, employees broke the news that their options were severely diluted, and the original 1 shares became the 1/25 after the listing. The actual value of the options in the hands of senior staff was not even more than that of the Internet giant company.

These options are paid by employees who have paid a discount, and some people even spend six yuan on their money.

On the 24 day, mogujie.com founder June responded by explaining that the option was diluted 25 times.

He said that all shareholders had dilutions, including investors and founders, and there was no problem of dilution of employee options.

June also declared that he was only responsible for the interests of clients, shareholders and employees, and was not responsible for anyone's expectation of wealth and freedom.

Leading to fortune The Freedom Trail

Options are one of the most important ways for start-ups to attract talents and motivate employees.

In short, the company gives out options to employees, allowing them to exercise their rights at a specified price in the future, and replace them with options.

If the company is successfully listed, employees will convert their options into equity and sell them after the expiration of the ban to earn profits.

Because the pricing of options is mainly based on the valuation of the company when the option is issued, most of the start-up companies have to turn over several times or even more after going through several rounds of financing and listing, so the difference sold after the pfer of options is entirely possible for ordinary workers to achieve financial freedom one night.

In September 19, 2014,

Landing at the New York Stock Exchange, the issue price of $68, opened up more than 36% to 92.7 U.S. dollars, the day received 93.89 U.S. dollars, with a total market value of up to 231 billion 400 million U.S. dollars, becoming China's largest Internet listed company.

Based on this calculation, Softbank chairman Sun Zhengyi became the world's richest man. Ma Yun's body reached 21 billion 900 million dollars, far exceeding that of Robin Li, who ranked second in about 5000000000, becoming the richest person in China. 28 partners and co founders became billionaires.

In addition, there are more than ten million millionaires born on the day of Ali listing.

Although the prospectus did not point out the number of employees holding specific shares, there were institutional and media calculations. In 2007, Ali B2B business went public, with 4900 employees holding shares, accounting for 70% of the total more than 7000 employees in that group.

7 years later, Ali employees increased more than 15000 people, accounting for 50% of the employee stock ownership, Ali shares about more than 11000 employees, after listing, each person can average nearly $4 million 220 thousand, or about 25 million 910 thousand yuan.

The same dream of riches still happened on the employees of millet.

According to the millet prospectus, 5499 employees can get option incentives, and these employees can get 32831 shares on average.

According to the current market value of about 260 billion yuan, the equivalent value of about 4000000 yuan is currently less than 15 days.

It has been calculated that the former number 100 may be a billionaire in the future, and the former 1000 may be among the millionaires.

It is not a high dilution ratio, but a low market value.

Not every story in the capital market has such a happy ending.

On the day of mogujie.com's listing, someone complained about the dilution of options on an anonymous platform.

This person claims to be an old employee of mogujie.com, and was recruited before mogujie.com's B round of financing, when there were only a hundred people in the company.

According to the staff, the number of mogujie.com options in the early days was quite large. Although the wages were discounted, they could hold a certain number of options at a low price, and the company appreciated the value very vigorously.

Many employees like him even gave up the chance to enter the BAT. Many employees, including the reveler, even spent more than ten million yuan to buy company options.

However, after the listing of the company, it was found that the option was greatly diluted, and the 1 share option was equal to the 1/25 equity of the company.

According to the above revelations, most of the 2016 mogujie.com issued options were 5000 to 20000 shares and converted to 200~800 shares, which was calculated at the closing price of 18.1 US dollars in December 24th, equivalent to 3620 US dollars to 14480 US dollars.

That is to say, employees who work in mogujie.com for two years can only get mogujie.com shares worth less than 100 thousand yuan, and they will have to wait until after the ban period, when they can deduct taxes and fees.

Not to mention the fact that some people have the right to exercise their options is quite harsh. It may take a few years for them to become real gold and silver.

Some netizens Tucao, this is not as good as the Internet giant's year-end bonus.

But from the prospectus, the core of mogujie.com is not the ratio of ADR to stock.

According to mogujie.com's prospectus, before the conversion to ADR, the total share capital of the company is about 2 billion 600 million, which is calculated at the market value of US $1 billion 400 million, which is US $0.56 per share. If the stock price is too low, the paction cost will be too high, so we must combine a certain number of shares into 1 shares.

Observing the data of Listed Companies in the past, we can find that when Youku was listed, the conversion ratio was 18:1, the cheetah was 15:1, Iqiyi was 7:1, and the reason why millet was 1:10 was because millet was listed in Hongkong, and it needed to set a reasonable valuation of the Hong Kong dollar.

The problem is that mogujie.com employees did not know their share of the company's total capital stock before, and naturally they could not estimate their value of option value, which was not related to the final proportion of these options.

June, founder of mogujie.com, in his response to friends circle, takes himself as an example. He is a Taobao fifty-first employee. If Ali's market value is the same as mogujie.com's, June's option will be about 300 thousand yuan.

June's remarks clearly imply that employees should not care too much about the value of the option at this time, and make the company bigger and stronger, and the stock market will increase by market value.

This also means another possible outcome. If the market value drops and the stock falls, these options will become increasingly worthless. Once the stock price is lower than the option price, the employees will lose money.

When Sina went public, it faced a similar dilemma.

In May 2000, when Sina was listed on Nasdaq, most of the employees' options were priced at $7.33. However, the subsequent collapse of the Internet bubble made Sina's stock price hovering below $10 per share for about two years, and even within a year's time, the share price was only one yuan or more.

At this time, the end of the Sina ban period, when Sina CEO Wang Zhidong suffered.

In August 1999, when he became president and CEO of sina, Wang Zhidong received $430 thousand in executive stock options of $1.

After the listing of sina, Wang Zhidong borrowed $430 thousand from the company to execute the options, and sold all the stocks he bought after the October 2000 ban, and estimated profits of $3 million 400 thousand.

In October 1999, Wang Zhidong once again received 1 million shares of $7.33 in execution price, ten years effective and immediate execution of stock options. Wang Zhidong executed the options before October 2000, but at this time, Sina's share price had already been lower than 7.33 US dollars.

According to the world clothing and shoe net, Cao Guowei, who worked for CFO at sina, thinks that the cost of domestic employees' options is very large in terms of operation and management, and is not as convenient as issuing bonus directly.

Cao Guowei said: "now we have a more realistic understanding of option incentives. Options are not a panacea. Sometimes they are really lucky."

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