Replies to post #8118 on GTC Biotherapeutics (fka GTCB)

[poorgradstudent]

Wait a second...

Are you telling me that even if a member of the management team has thousands of options that are underwater, the company can still pretend to "incentivize" said member of management with even more options at lower prices? Why would you repeat the same incentive when the first one didn't work?

Next thing you'll tell me is that they receive these options grants for free...

[DewDiligence]

Re: Option repricing

>Remember if the options are underwater they can be repriced with relative ease. It happened after the 2000 tech decline.<

Since the late 1990s, option repricing has been treated severely under GAAP. Moreover, GAAP considers any re-issuance of canceled options at a lower strike within six months to be a repricing.

Development-stage biotechs do not normally care a lot about GAAP profit and loss, but the GAAP treatment of options repricing requires companies to explain the accounting treatment in great detail and this brings unwanted attention to the transaction. As a result, option repricing simply isn’t done anymore by reputable companies.