On April 7, 2017, Okta, Inc. successfully went public on the NASDAQ stock market. Trading under the symbol OKTA, shares were initially projected in the $13-$15 per share range according to numerous public reports. The stock has been consistently trading in the $23-$24 range – you can follow the activity at http://www.marketwatch.com/investing/stock/okta
For those of you who don’t know, Okta helps businesses leverage the cloud and transition from traditional corporate infrastructures to a more modern, cloud-based infrastructure, while maintaining security and increasing flexibility for employees. As of the S-1 filing, Okta had 3,100 customers in 185 countries with plenty of big names on the list.
Like most IPO’s, Okta’s employees likely face a blackout period in which they cannot sell shares. Typically, this period lasts around 6+ months (expiring around October 6th, 2017) and employees get to enjoy what can be a roller-coaster ride of their net worth. With recent history being our guide, tech IPO’s have created massive wealth for employees, but have also seen massive volatility in the stock price.
With that in mind, we have created some planning ideas we will spell out over the next few weeks that help employees at Okta or any other public company where a blackout period is in place. We want to make good decisions that are specific to your goals.
Be Honest With Yourself
Yes, you are “bullish” on Okta, but how much risk are you REALLY willing to take on? First, don’t let other employees dictate what YOU should do with your stock/options. By creating a plan to sell some shares, you are not giving up on the Company, but rather prioritizing your personal and family goals.
Have you ever completed a risk-tolerance profile? Are you totally fine seeing your entire net worth rise by 200% only to see if fall back to 50% of the original value all while your handcuffed to do anything about it? Simply put, the blackout period will end, but there’s always another one coming and your windows are limited.
In working with people around the country on how to answer these questions, we believe the first step in determining what you should do is a very personal decision. Set aside a couple of hours to spell out your personal and financial goals and you’ll find you can meet them faster than you think; if you are smart about the decisions you make with your equity.
The question shouldn’t be “what should I do with my equity”, but rather “how can I leverage my equity to achieve the goals I care about ,and do it in the most tax-efficient way possible”. In our next post, we will begin detailing out some of the ways to begin this process and how to tactically create a plan.
Interested in creating a plan now? Contact us today and we can customize one for you!
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