I have read the blog about tracking employee stock plans: https://www.sharesight.com/blog/how-to-track-employee-stock-plans/ but the results don’t make sense to me.
Let’s say I have 1000 vested options in Acme Corp at a strike price of $1, and the current valuation is also $1. If I “buy” them at $1 the total value is shown as $1000, but it should be $0.
If the share price then increases to $1.50 the value per option would be $0.50, not $1.50.
Let’s say I’m later granted 1000 more options at the new valuation of $1.50. I now have 2000 options, but the total value would remain at $500.
Finally the valuation increases to $2.00 per share. The value would be ($2.00 - $1.00) * 1000 + ($2.00 - $1.50) * 1000 = $1500.
Am I thinking about this incorrectly? Is there another way to accomplish it?
Why not enter the original acquisition in Sharesight as a buy for $nil per option (meaning they were granted to you for free).
You can then change the value by entering a new price at various point in time.
Also, I wonder if you are confusing the strike price of the option with the price you pay for it or its value - these are three completely different things.
Unfortunately I can’t enter a price of $0. I suppose $0.01 is close enough, the actual value is in the $10-ish range.
I’m by no means an expert but I think I’m on the right track. Strike price is whatever the company decides to grant options at. Exercise price is the price at which I convert the options to shares (if I do at all - chances are I will only do this if the company exits, so buy and sell on the same day). Value will fluctuate with company growth or contraction, potentially below the exercise price or option price.
But if the current valuation is higher than the strike price, there is unrealised value I want to track (conditional of course on being able to exercise those options and sell at that valuation)