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This is a very SCARY eHow article on repricing - read then pick up your jaw

How to Reprice Underwater Stock Options | eHow.com http://bit.ly/9V6OuA

This is "information" being given on the internet.  There is a comment section. 

Perhaps several ECE members need to provide some real insight into how things work in the real world.


Here's the instrcutions from the article "How to Reprice Underwater Options":

Difficulty: Moderately Challenging


Things You'll Need:

  • Stock ticker symbol
  • Current stock price
  • New securities
  1. 1

    Get the current stock price using the company's ticker symbol. The ticker symbol is the symbol by which the company's stock trades on a major stock exchange. You need this number to reprice underwater stock options.

  2. 2

    Reduce the exercise price. This essentially reprices the current stock option exercise price to the lower, current stock price.

  3. 3

    Cancel all stock options contracts. In order to reprice the stock options, you have to cancel the current stock options contracts that reflect the higher exercise price.

  4. 4

    Issue new options contracts. After repricing the stock options to reflect the lower stock price, you must then reissue new options contracts. This is basically offering a new security called a value-for-value exchange.

Read more: How to Reprice Underwater Stock Options | eHow.com http://www.ehow.com/how_6895196_reprice-underwater-stock-options.html#ixzz0ysAPRsbX

Replies to this Topic

I never knew life was so easy!   This is past Scary into dangerous

If only life could be this easy!  What a joke.

I want to thank Paz Dizon for finding an even funnier and scarier post (how to exercise your underwater options:


You must be kidding!  Interesting picture though.  If anyone does follow this advice, its sure to generate work for consultants - cleaning up the mess!

I really wish you would say this was all an April Fool's Day joke,  the sad thing is some people will actually follow those steps.

I think we may need to start a small campaign to let eHow know that these are unacceptably bad and must be removed immediately.

or, perhaps their real name is eHowNOT.....



This same blogger also had scary pieces on option valuation, wash sale rule and a couple more I cannot remember - I commented on all of them and also flagged them as dangerous to the eHow reviewers.  If I can save even one person from following this irresponsible advice it will be worth the sacrifice of having to become an eHow subscriber to do it...

Oh, and the best one of all - How to Backdate Employee Stock Options (posted 8/23/2010) with my favorite quote "While backdating stock options isn't as common as it once was, it still occurs and doing so does not violate any laws as long as the employer reports the details of the grant within the two-day window." 

I notice that my comments are not showing up.  That distresses me.  Please sign up on eHow and Flag this blogger's nonsense.  She really deserves to be reined in.

Edited Wed, Sep 8, 2010 4:14 PM

I joined and flagged them as dangerous as well... scary, scary, scary!

Rather than start a new "eHow" thread i thought I would add this latest piece of misinformation to this great thread.

Equity Compensation Agreement | eHow.com http://bit.ly/c1i9Og

Here's another - this time covering ESPPs.

What Is an Employee Stock Purchase Plan? | eHow.com http://bit.ly/aip5N5

BTW:  I love the part about how the $25,000 limit exists to limit "corruption"

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