After thinking more about Zelibor's Form 4.
Are you kidding me any of us with half a brain would have done the same thing. I invite you to key in on this line.
All gains going forward on 500k Shares are now taxed as Long Term Capital Gains.
He Didn’t wait until May, he knows how many NDA’s are out there, I’ve always said that there is buyout in the cards, he didn’t wait until May. I'm not saying it will happen but it may and one needs to prepare.
High probability that tax rates will be going up next year, so it was a good move, let's keep the same rates and use $100 all cash buyout number.
500,000 shares $100 buyout 50 Million added to his salary taxed at 37% 18,500,000 in tax to Uncle Sam.
500,000 shares $100 buyout already covered the nut on 240k shares so the remaining 260k shares are taxed at 20%. 26 Million bucks long term cap 5.2 Million. So he saved 17% on 26 Million = 4.4 Million dollars.
I know everyone wants to hold the line and not sell forever but we all have our number.
Again here is the logic, do not confuse Options with Warrants they are 2 different things.
How the Move went down and where the money went, Not In His Pocket.
Compensatory stock options are not taxed on the receipt of the option as long as the option is priced at fair market value however When you exercise it, any spread is taxable as ordinary income.
So basically what happened he obtained 500,000 shares and it cost him 240,000 cashless warrants shares, He Netted 260k shares bottom line the shares he owned increased 260,000. The Company recieved $650k from his options the stock he sold was cashless so he gets the difference between what it was when awarded and what he sold it for on the street.
500,000 shares Transaction code M - Exercise or conversion of derivative security exempted pursuant to Rule 16b-3
If he waited until May 2022 and did not exercise them he would loose them.
From here out profit no matter what will be taxed as long term cap gains.
500k shares at $14.66 = 7.3 Million added to his income 37% tax is 2.7 Million in taxes Divide that by 14.50 per share is 186,000 sold for for the tax man, so he sold 240k total,,, remember that the Company receives 650k from him divide by 14.50 = 44827 Add 186,000 and 44,827= 230,827. Close enough for me. (looks like the difference between what it was when awarded and he sold it for on the street)
Xster smokin calculator don't let the naysayers try and freak you out.
Here it comes but X we will never sell,,,,, then they freak when it drops a few % points. We All Have Our Price.
His share count went down 240k in the event of the buyout all would have been factored in, basically held down the outstanding share count by 240k. This is what happens when a company rockets up and took a long time to do so.