[greenspam]

Right. Instead of the IPO date, or the end of the lockup date, they chose 3/15 as the date to settle the vested RSU. And require us to estimate our tax, based on the fair market value of that future date, with this formula, and pay cash, otherwise the vested RSU will be canceled:

Number of vested RSUs * the estimated fair market value of the stock at the settlement date * the appliable highest marginal federal, state, local income tax rate and employment tax rate.

In theory if someone pump up the stock price for that date, we are screwed. Even if no one pump up the stock price, the amount of cash needed in such a short notice, is unbearable, which will make most ex-employees to give up their shares.

[andrewf]

(Again, not an accountant, I repeat that because I might be wrong and I'd hate anyone to suffer because of that..)

There are a couple of different risks here. One is that you pre-pay the company for more than the FMV ends up being; it sucks, especially with interest rates being as high as they are, but you'll get the money back with your tax return filed next year.

A different risk is that the price is spiked high at the moment the FMV is determined, and then falls before you're able to sell the stock. This would leave you with a short-term capital loss which you'd only be able to claim back at $3,000/year - https://www.irs.gov/taxtopics/tc409#:~:text=If%20your%20capi... - unless you have other short term capital gains in the same year to offset it against.

Has the stock been volatile since the IPO? How does the daily trading volume compare to the number of shares that will exit lockup on 3/15? If I were in your shoes that would inform my evaluation of the risk.

[JumpCrisscross]

> One is that you pre-pay the company for more than the FMV ends up being

There is another duck move in the bag, and that’s paying by cheque. Reverse if unfavourable and settle out of court. Again, massive dick move and—in my opinion—highly unethical. But the regulators and law enforcement are being defunded.

[bjtunfs]

Price is mostly flat since IPO (up or down within ~10% mostly), looks the stock is thinly traded, daily volume is less than 100k shares.

[andrewf]

I'll add that, the original post says the vest date was in 2024 but the settlement date is in 2025. I'm a little surprised (but I'm not an expert!) that your taxable event is in 2025, rather than occurring on the vest date at that date's FMV. Generally the "vest" event is the point past which you have no (per some complicated definition) threat of forfeiture... but the company is threatening to forfeit the shares pending conditions...

In your shoes I'd be seeking an accountants' advice re: (1) do you already owe tax on these shares for tax year 2024? (2) if you don't take receipt of the shares for some process reason, might you still owe taxes on them?

Sorry you're going through this, I hope it's worth it in the end.