Roku, one of the leading digital streaming businesses, is looking to raise somewhere around $204 million when it IPO’s in the near future. It was initial reported that the raise would be somewhere around $100 million https://www.cnbc.com/2017/09/01/roku-files-for-ipo-of-up-to-100-million-dollars.html but with a target share price of $12-$14 – the raise will be more than double. https://techcrunch.com/2017/09/18/roku-looks-to-raise-204-million-in-ipo/
The clock is ticking on employees who may be considering exercising options before the IPO. Generally speaking, how you approach this should depend upon a couple of things:
- How many ISO’s (incentive stock options) can I exercise without having to pay any AMT (alternative minimum tax)? Generally, each person has some buffer in which they can exercise options without paying tax – this should be done each and every year, not just during an IPO year. It doesn’t apply to everyone, but should always be calculated.
- Bearish? You think the stock price will come down from the $12-$14 target? You may want to consider waiting it out.
- Bullish? You think $12-$14 is a screaming deal? Exercise now before it’s too late!
Overall, we always encourage people to tie their strategy to an overall plan, coordinating tax efficiencies with financial goals, investing and general planning. Too often, decisions are made emotionally or with a focus on just tax or just speculation of price. Let’s talk and create a plan to evaluate the whole picture and come up with a plan!
Roku, Inc. will trade under the symbol: you guessed it, ROKU.