SBC is a hot-button issue in the cloud world today. Part 2 of this series covers a discussion on: valuation implications of SBC and managing SBC impact.
Humbled to be mentioned in this outstanding article. Thank you Janelle!
Buy-backing shares to offset dilution is not necessarily bad if done at a price well below the intrinsic value. However the adverse incentive to keep purchasing also at irrational prices is a real risk. I would value case by case.
"large cap SaaS companies are spending a sizeable portion (30%) of their cash flow on share repurchases but shares outstanding are still rising (+7%)" = insane.
Great work Janelle. From am issuer perspective, does it trigger a tax event when options are exercised and company receives cash from conversion into shares? (I am assuming it is NOT a cashless exercise). Thank you
Love your work, thanks for making me smarter.
Humbled to be mentioned in this outstanding article. Thank you Janelle!
Buy-backing shares to offset dilution is not necessarily bad if done at a price well below the intrinsic value. However the adverse incentive to keep purchasing also at irrational prices is a real risk. I would value case by case.
"large cap SaaS companies are spending a sizeable portion (30%) of their cash flow on share repurchases but shares outstanding are still rising (+7%)" = insane.
Great article! Any insights on SBC and it’s correlation to layoffs?
Great work Janelle. From am issuer perspective, does it trigger a tax event when options are exercised and company receives cash from conversion into shares? (I am assuming it is NOT a cashless exercise). Thank you