[xycodex]

Options usually have an expiry when granted, i.e. they need to be exercised (employee pays cash at the strike price for it) before the expiry.

You need to pay capital gains tax when the gains are realized, I.e. at exercise.

I’m just speculating here but I think the problem is that the value of Airbnb stock has increased so much that the taxes due on the capital gain large enough that these option holders can’t afford to pay it without a liquidity event e.g IPO, where they could just sell the acquired stock to pay taxes.

So these early employees that were compensated in options are in this weird place where they can’t afford to exercise and are short on luck if their options expire before an IPO.

Also if you leave the company, your options usually expire some time after (perhaps 90 days?). I think that’s why some employees are complaining the lack of an IPO prevents them from moving on.

I presume later employees are conpensated in Restricted Stock Units which don’t have this problem.