This August, it will be three years since Google’s initial public offering (and since I started this blog as a way to track the company). When that happens, according to NBC News, nearly 3 billion dollars in pre-IPO options will vest, with over 450 early Googlers earning an average of $6.5 million. These are quality employees, many of whom are responsible for Google’s early growth, and they will instantly receive the option of becoming millionaires and leaving the company.
Will they?
Google isn’t the first company to have this kind of success. Microsoft’s stock turned a lot of workers into enormously wealthy people (there was always the joke of the millionaire secretary), and it cost the company some quality people. Google is going to lose a lot of employees, some of which have been biding their time waiting for their shares to vest, and those employees will leave and actually leave the company stronger. Other employees love working at Google, but will be distracted by the money and stop producing as well as they have.
Still, there will be employees who would never leave Google, but understand that it would be stupid to not cash in those shares. For all we know, Viacom could win its lawsuit against Google, and several lawsuits later, that stock will be worth a whole lot less. They’ll sell it all on day one to guarantee their financial security. Being millionaires, they might leave their jobs (which apparently pay less than similar jobs at Microsoft), or they might stay, but the sale of several billion dollars of shares will severely impact the stock.
On the anniversary day, I suggest preparing for a nice dip in the stock. Nothing terrible, but a ten-dollar drop wouldn’t surprise me.
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