With the full approval of its board, eBay is issuing ever-increasing amounts of stock options, transferring an unusually large portion of the company's market value to corporate insiders. And many of these insiders have wasted little time in cashing in, selling hundreds of millions of dollars worth of stock, even as other investors, especially mutual funds, have bought up the shares.
And it seems that even the peons might benefit:
Despite these concerns, eBay shareholders last week overwhelmingly approved a proposal that would increase the number of shares available under its latest stock plan by more than 50%. The proposal would allow the company to give away an estimated $1 billion worth of options, about $250,000 per employee, this year alone. This year's handout is more than four times eBay's net income last year.
Nice. A little more of the mini-bubble, perhaps?
Posted by jzawodn at June 30, 2003 12:03 PM
The increase in stock options of late is a completely natural response to the slumping economy. Instead of needing to pay more, Ebay ties in employees to a further 8 year term if they want to buyout of their options.
After all, give someone 250K over 4 years (all the options are only able to be used after current option periods end) and they are likely to stay.
This is why investors okayed it. Not because it was bad, but because it was good. Get people committed, give them a reason to stay, and if people leave then noboyd's lost anything. Plus, it's not like a massive selloff can happen, only 10% of the company's stock will be sellable from options each year.
I hate ebay. They conciously don't care about fraud. I am not kidding. It is pretty easy to spot shill bidding, at least warn people about it, using software, but they simply don't do anything about it. Not only that, even you find shill bidding yourself, you can't get your money back. Even ebay will not give the part which they earned through shill bidding.