The Liquidity Event Podcast: Episode 38

 

Episode 38: The Richest Man in Staten Island

Welp! We finally have a big olde IPO in 2022 folks! Excelerated Energy Energy, a Texas-based natural gas company took advantage of market fears around rising gasoline prices to have a very successful IPO on Tuesday. We’ve got the first successful Amazon union at a warehouse in Staten Island. And in other union-ish news, Etsy sellers are not happy with the company’s decision to raise their transaction fees. We’ve got a great scam of the week with a former Yale administrator. This one strikes hot.

Read the Full Transcript:

Speaker 1:
This podcast is for informational purposes only, and should not be considered tax or investment advice. Welcome to The Liquidity Event, a show about all things personal finance, with a laser focus on equity compensation. Hosted by AJ and Shane of Brooklyn FI. Each episode will take you through the week's news on fintech, IPOs, SPACs, founder wins and fails, crypto and whatever else these nerds think is interesting. Learn more and subscribe today at Brooklynfi.com.

Shane:
Welcome to The Liquidity Events. We are your hosts, Shane Mason.

AJ:
And I'm AJ. Oh, well last names now? I'm at my standing desk. I don't have a last name. First names only.

Shane:
I like to catch you off guard. What's your last name?

AJ:
Ayers.

Shane:
Ayers.

AJ:
FKA Grossan.

Shane:
You say FKA, what? Grossan?

AJ:
FKA Grossan. Folks, if you're going to change your name, talk to me first, because it's a pain in the ass.

Shane:
Should all women do FKAs?

AJ:
Oh, yeah. It's a good idea. On LinkedIn, FKA Ally Grossan, AJ. I had a complete reinvention of myself. I was Ally Grossan in high school and now I'm AJ Ayers. Different person.

Shane:
Yeah. It's a whole new world. You can be whoever you want when you change your name, right?

AJ:
It's true.

Shane:
You can be much more extroverted or much more...

AJ:
The internet still exists.

Shane:
Earn a lot more income or be more confident.

AJ:
My music taste hasn't changed. That's probably the only thing that hasn't changed.

Shane:
Right? You only like [inaudible 00:01:39]. The only thing that hasn't changed.

AJ:
And Emo. Anyway, it is episode 38 of The Liquidity Event, being recorded on April 13th, 2022. Airing on April 15th, 2022, which is Tax Day. Which is actually not Tax Day this year, because Tax Day has moved to Monday, April 18th. So happy early Tax Day, listeners. Shane, you look great.

Shane:
You get a bonus tax weekend this year. One extra weekend of taxes.

AJ:
Yep.

Shane:
Now with 2% more taxes this year.

AJ:
Now it's 2% more misery for your [crosstalk 00:02:20]. It's been a good season. A good tax season, I would say. Incredible term.

Shane:
We set a lot of boundaries this year and things went a lot smoother.

AJ:
Yeah. This late in the season, you really start to see the emotions around taxes come out. It's like, "Folks, we've been asking for documents for a while." Your average Joe or Jane doesn't think tax season starts until April. And for us, it's over by then. We've talked about that before on the show. But even my friends are like, "Hey, can you look at my tax return?" I'm like, "No. It's April 13th, bud. I was available in February when you had your documents, but I don't have time now. I'm sorry." So the earlier, the better. Things to learn for next year. We already know that. What else is going on, bud? What you drinking? You drinking anything?

Shane:
No, in the evenings I drink, but-

AJ:
Oh, right. You're in Los Angeles. This is lame for you. It's three o'clock [crosstalk 00:03:24].

Shane:
I'm not popping whiskies at 2:30 in the afternoon.

AJ:
Oh, I am.

Shane:
Good God. What is that?

AJ:
For those that are watching on YouTube or wherever you're watching this, this is a can of wine. It's a... Where's this maybe from? I think it's a-

Shane:
This is as ratchet as you get.

AJ:
Oh, it's from Chile. It's a Pais and a Carignan. This is [inaudible 00:03:45], it's going to be...

Shane:
You're just saying made up words now.

AJ:
Those are grapes. That's pretty good for an old can of wine.

Shane:
You're unboxing this live? You're doing an unboxing on the... Are you going to send this episode over to the can of wine company?

AJ:
I'm just waiting for some... I don't know. I don't know what I'm waiting for.

Shane:
No one is ever sponsoring this show. We have 12 listeners.

AJ:
That's not true. We have lots of listeners. We had an insane listener spike last week. I guess we're finally getting funny or at least talking about things people are interested in. Because it was a game changer, last week.

Shane:
I finally did an episode in a tank top, is what it was actually. So you're welcome for that.

AJ:
You're the worst.

Shane:
On a radio show.

AJ:
You are the worst.

Shane:
My looks have finally kicked in, on this radio show.

AJ:
Oh boy, oh boy, oh boy. Oh. We finally have an equity... We finally have a deep dive this week. It's been a bit of a barren desert of IPOs over the past of the first quarter of 2022. But we have our first big boy. It is-

Shane:
Wait, wait, wait. Listener, try to guess what industry has an IPO this week before we tell you. It's a company where, when the price of something goes up quite significantly, selling that item or a competitor to that item is probably... It's natural gas, you all.

AJ:
It's natural gas, you all.

Shane:
Energy. All right, sorry. That's my only contribution to this deep dive this week.

AJ:
Let's hear it for the gassy boys in the back. Wait, wait. There was a great quote from there. From their S-ONE.

Shane:
Wait, wait. You didn't say who it is and all that.

AJ:
Oh, I didn't. It's Excelerated Energy. So they filed their S-ONE back in January and they just went public yesterday, actually. So we have some pricing data already. They debuted at $24 a share and trading was pretty stable throughout the day. And I think they gained stocking a little bit, but we didn't see any exciting first day pop or crash as we have seen with some of our more exciting tech FUs over the past year. But there's this great quote here about re-gassing. So let me read what they do. "Excelerate is changing the way the world accesses cleaner, more affordable and reliable energy by delivering re-gasified natural gas, benefiting hundreds of millions of people around the world." So they're re-gassing natural gas, which is what I say to my husband after I eat a Chipotle burrito. Oh!

Shane:
No, no, no. The joke is, when you have flan for dessert after nachos.

AJ:
Oh, okay. Sure, sure. Re-gas of the gas here. And speaking of re-gassing the gas, one of the key shareholders of this here, natural gas or alternative energy company is none other than George Kaiser, who you may know as the richest man in Oklahoma, who inherited a bunch of family oil money and made some pretty smart investments decisions. So he's worth about $14 billion. So he's got a lot of his eggs in the oil basket over here. "Why don't we diversify a little bit, start up a natural gas company." So good for you, George Kaiser for added some billions to your balance sheet with this IPO.

Shane:
Okay.

AJ:
What?

Shane:
He's a petty billionaire at this point. He's only got 14 billion?

AJ:
He's the richest man in Oklahoma.

Shane:
Let's see, Bezos has 250 billion, so that makes Bezos 70 times richer?

AJ:
He owns the Bank of Oklahoma.

Shane:
You know, what's the crazy thing?

AJ:
Oh, he's a cancer. Born July.

Shane:
I always try to translate the billions because it's so much money. It's $999 million. I always think if you paid a hitman a million dollars a year, this guy could afford 14,000 or 140,000 hitmen. I just try to translate that into the violence you could create on earth if you really want to.

AJ:
Oh, that's your metric? Is violence?

Shane:
I don't know, it's just one thing that pops up. It's like, how many private armies could this billionaire create and form their own country?

AJ:
Yeah. I always think about solving housing problems. That's my gauge of billionaires. Like, could you solve the housing problem of Crown Heights?

Shane:
No, this isn't the 1860s, where billionaires solve problems. Like they just create libraries in every city.

AJ:
But I'm talking about now. If you think of it in terms of killing people, I think of it in terms of, how many million dollar houses could you buy people who really need them? So, could you solve the Crown Heights housing problem? Could you solve the entire Brooklyn housing problem? Could you solve housing for the entire world with your billions?

Shane:
Yeah.

AJ:
That's my metric. It's like when you're working an hourly wage, and I'm sure a lot of people think this. And I think of my time still as hourly. It's like, when I don't want to do something or how much something costs, it's like, how much is my time worth? So it's an outsized version of that. Anyway, investment bankers, saying its IPOs are hard to price. They weren't sure if they were going to get it right, because we're in this period of extreme volatility, but it was a successful IPO by all standards. So maybe that will hopefully signal to other companies wanting to go public that, "Hey, this market is not as crazy or volatile as you thought. We had a successful IPO. Step right up, step right up. Let's go public, folks. I'm here"

Shane:
And I think the market is still volatile, but it's volatile because of a Eastern-European war, which has cut off the natural gas supply to a lot of people. And these people sell natural gas. So even though it is very volatile, it works in their favor.

AJ:
This is a good moment.

Shane:
Yeah. Volatility works in some people's favor.

AJ:
Yep.

Shane:
Yeah. You think they were just sitting on their S-ONE like, "We'll just wait until."?

AJ:
Absolutely. Yeah. They filed in January.

Shane:
You think they had an in-line to... Do you think this is why Russia invaded Ukraine? How much of a conspiracy theorist?

AJ:
You're much more of a conspiracy theorist than I.

Shane:
What if you're sitting on your S-ONE and you're like, "I don't know if we're going to file this thing. Gas prices are $30."

AJ:
Yeah. You're like, "Call it, call it."

Shane:
And then Russia invades Ukraine and cuts off natural gas supplies to Western Europe.

AJ:
"Call it, call upon Vlady. See if Vlady [crosstalk 00:10:23]."

Shane:
All right. What else do we have?

AJ:
I hope never to be rich enough to influence global politics. I don't think those people are happy. Anyways.

Shane:
That's not what you say in private.

AJ:
I don't want to be that rich. That's problems rich. I want to have no problems.

Shane:
I just want to be rich enough to never have to think about beef jerky prices.

AJ:
Mm-hmm (affirmative).

Shane:
You got the bag of beef jerky, you're like, "How much does this cost? This is expensive." You never had that moment?

AJ:
Yeah. That biltong shit, that South African air dried beef? That stuff is so good, and it's $25 for a packet.

Shane:
We're so far apart in some places. Like, what? I'm making an excellent beef jerk joke and you immediately go to some... What?

AJ:
You never had a biltong?

Shane:
God. Just keep moving. What the hell?

AJ:
Oh my gosh. Anyways, I don't have a good segue here. I'm going on strike against you. And so are Etsy sellers.

Shane:
No, no, no. Speaking of exquisite home crafted culinary, artisan beef jerky. That's the segue, Etsy is-

AJ:
Sure. Can you sell food on Etsy?

Shane:
Oh, I don't know. I don't think so.

AJ:
I don't think you can.

Shane:
It's a whole different ballgame than cutting boards and notepads.

AJ:
I have a question for you.

Shane:
Yeah.

AJ:
Which sounds better? Your latte costs 30% more, or a $1.50 more?

Shane:
Probably 30% more. Because it probably already [crosstalk 00:11:54].

AJ:
Sounds better to you?

Shane:
Yeah.

AJ:
Interesting. OK, cool. I'm just curious.

Shane:
Well, just because my coffee's probably already $4. So 30% of that is a $1.20.

AJ:
Yeah. All right.

Shane:
I'm not your average [crosstalk 00:12:06] average.

AJ:
Never mind. You have fucking fucked up my shit, anyway.

Shane:
No, I hear where you're going with this. Yeah.

AJ:
Anyway, Etsy sellers. Etsy is raising their cost to sellers, a transaction fee. So historically since 2005, the fee has been 5% as a transaction fee that sellers have to pay that cost.

Shane:
So you sell something for $100 and Etsy gets five bucks of the sale?

AJ:
Yep. You list on their platform, they handle a lot of the legal stuff. That's the fee that they take. Etsy's argument is, it's a platform. This is a community, people come here, they trust Etsy. They're going to have a good experience at your store. For that privilege, you got to give us 5% of the sale. So they just recently announced that the fees are going up from 5% to 6.5%, which is a 30% increase. And all the headlines said, "There's a 30% increase." And it actually took me three or four articles to find out. I was like, "What is it increasing from, to?" Anyway, I don't sell in Etsy, but I would imagine that, that's a pretty big blow for a lot of sellers. Their margins are pretty slim. And has Etsy had a good few years in terms of profits?

Shane:
Yeah, yeah, yeah. So I just was reading this article and there's a petition out from sellers, which are acting like a union in response to Etsy's platform, which is essentially their employer or their administrator of their employment. So they have 74,000 signatures on a 75,000 goal for this petition. And they list out all of their issues with the hike. And one of their issues is that, they're raising it by 30%. It's really going up by 1.5%. So if you can't stomach a 1.5% increase in your margins, I probably shouldn't be in business anyway. Frankly, capitalism will take care of that. But they also mentioned that Etsy has already had an incredibly profitable year and I went and looked at their past three years of financial results and yeah, they have. Etsy's one of the biggest turnaround stories in the tech industry.

Shane:
Their stock price went from a 100 to $8. And then now it bounced all the way back up to over the $100. I don't know where they're at right now, but yeah. They had their earnings per share, essentially for every share outstanding. It's a great way to compare two companies, because companies can have different amounts of shares. Their earnings per share five x'd over the last three years. Which means that for every share that you own, your net income on that share has gone up five x, which is huge. And they're raising fees on sellers. It's like reducing your wages to your employees, essentially in an inflationary environment.

AJ:
Right. Instead of giving your employees a bonus for everyone having a great year and for them contributing to your growth, you would be docking their pay.

Shane:
Yeah. I get the outrage here. That's pretty nuts.

AJ:
Not a good story.

Shane:
Yeah. They had a few acquisitions last year. They bought the Etsy of Brazil and some other big company for hundreds of millions and they still had net income of $400 million in 2021.

AJ:
Is that Etsy [foreign language 00:15:12]? Like [foreign language 00:15:14]? The Brazilian steakhouse?

Shane:
[crosstalk 00:15:17] Etsy.

AJ:
Have you ever been to Fogo de Chao? But seriously, you ever been to Fogo de Chao?

Shane:
No, I'm more of a gas station, beef jerky guy. That's my...

AJ:
Stop posturing your nonsense.

Shane:
So yeah. I feel them on this. There's a few other things. They mentioned this offsite ads that happen. I guess Etsy will come in and they will advertise your stuff on another site, but because they're paying for the advertising, they actually pass it onto you. And I don't think you can even control it. And it's up to 20%. So not only does your margin go down by that five or six and a half percent, but down another 20% due to the advertising that Etsy does. And you foot the bill for the advertising against your will. That sounds terrible.

AJ:
Right. There's two sides of that argument. It's, would the sale have happened anyway? Would this person have found your Etsy store? Probably not, but because Etsy paid for the ad on Instagram and knew that, that person really liked hats that have funny kittens on them. Because they sourced that for you, they created that sale. So therefore you're going to pay the ads. That's the other side of that argument, there.

Shane:
Yeah. Which makes sense. And then there's this other idea in the petition that Etsy is not supporting true small boutique sellers with their support tickets. And they can just get wiped off the platform without a human being, being involved. Meanwhile, there are these companies that the best analogy I can come up with is a Zara, like a fast fashion. They'll look at these, the trends and the zeitgeist of what's going on on Etsy. And then they'll churn up a factory to mass produce what looks like a small supplier of custom things, when in reality, they're just pumping them out. And then they get this priority treatment because it increases that income and revenues. Whereas the small guy gets stomped on and destroyed, which is the story of the past 40 years?

AJ:
Three millennia. I love Etsy. I buy stuff on Etsy all the time. I buy wacky gifts and personalized things, and vintage glassware and all kinds of good stuff.

Shane:
All right.

AJ:
I've gotten all of your birthday presents for the past four years on Etsy.

Shane:
[crosstalk 00:17:22].

AJ:
Which were fabulous, by the way. They were Tuckies socks.

Shane:
Ooh, I still have those.

AJ:
Trucker Captains hat, which definitely you lost, which is fine.

Shane:
It's on the boat.

AJ:
Okay. And there were others. I forgot what the others were.

Shane:
Liar.

AJ:
Maybe I'll need to. All right.

Shane:
What else we got?

AJ:
Speaking of selling things on platforms, we've got a former Yale employee admitting that she stole $40 million in electronics from the university. So this is an employee who is a former Yale administrator, who pled guilty to wire fraud. Of course, it's always wire fraud and a tax offense for her role in the plot. Essentially, she was the director of finance and administration at the department for emergency medicine. She was in control of the budget, basically any expense up to $10,000. She had cart blanche to authorize. So essentially she was just buying easy to resell electronics, such as iPads and laptops, reselling them on the quote, unquote, black market. I don't really go into detail of where she sold them and made-

Shane:
In New York. She sold them across state lines. That's why it's mail fraud.

AJ:
That's why it's wire fraud. It's always wire fraud.

Shane:
Wire fraud, yeah.

AJ:
I stole $113 worth of really fancy pens from my last employer. I had to get that off my chest.

Shane:
Bandcamp?

AJ:
No, not Bandcamp. Bandcamp was a virtual office. There were no office supplies provided. A publisher I used to work for a million years ago.

Shane:
This is your, getting it off your chest here?

AJ:
I'm coming clean. Yeah.

Shane:
$113?

AJ:
I worked there for seven years.

Shane:
You made 25,000 a year?

AJ:
Yes, they did pay me poorly. So I felt very vindicated in my usage of the office products that I needed to edit manuscripts. But anyway.

Shane:
You know, justification is one of the three steps to fraud.

AJ:
To wire fraud.

Shane:
An opportunity, justification, and the need. I believe are the three requirements for fraud.

AJ:
Wait. So at the time of her guilty pleas, she was in charge of two Mercedes-Benz vehicles, two Cadillac Escalades, a Dodge Charger and a Range Rover. Too bad we're having a gas crisis. It's a lot of gas guzzlers in the driveway.

Shane:
Wait, so she had six cars?

AJ:
Two Mercedes, two. Yeah, six cars. Why do you need two Escalades?

Shane:
Oh. Because in case one of them is in the shop, you got your backup Escalade.

AJ:
I think-

Shane:
You know how embarrassing it would be if you were going to pick up your dog from the daycare, and you just had your Mercedes-Benz instead of your Escalade? They might judge you for not having enough room for the dog.

AJ:
I have to say, no one needs to drive a car that big. I think they're very silly, they're really bad for the environment. But I was in an Escalade recently, because I called a Rideshare and an Escalade showed up. And I was like, "Oh my God, this feels amazing."

Shane:
I feel-

AJ:
I was like, "You know what? I get it, I get it." You know, I'm an honest person. So I have embezzled a little bit of money from Brooklyn FI. My Escalade is parked outside.

Shane:
Oh, God. You pulled the credit card statement?

AJ:
Anyways.

Shane:
I thought when you said, "Speaking of selling things on platforms," you were going to that into this Amazon warehouse strike or labor story.

AJ:
Right. A successful formation of a unionization at a Staten Island warehouse for Amazon. Yeah. Amazon workers formed a union, which is the ALU, the Amazon Labor Union. It's a new organization and they were successful. They had a vote amongst their roughly 8,000 employees. And when you have a vote in a workplace, if there's enough yes votes to form a union, you have a union. So Amazon is not happy. Amazon tried to stop this by papering the walls of the warehouse with banners that proclaimed, "Vote No," instead of a website and held weekly mandatory meetings. And even hired an influential consulting and polling firm with close ties to Democratic political groups, and touted its own benefits over those offered by the union. So basically Amazon saying, "If you leave us, kiss these good benefits, goodbye. You'll have to rely on the union to provide all those great benefits for you."

Shane:
Yeah. Definitely trust your corporate overlords. I don't know how to think about this. I wonder if this is the beginning of the end. Unions are hopefully going to turn a corner? What is it? Wealth inequality is not going to get fixed by unions. I guess that might be a part of it, when we talked about Thomas Piketty's solutions for wealth inequality, last episode. And it's really just, tax the rich. And I guess thousands of unions popping up is going to be one way to shift income from the rich to the proletariat. But it seems a lot easier for our government to just do a federally mandated wealth tax.

AJ:
Right. Yeah. It's, if you need a union or what about, meet the demands of the workers who need to get paid a little bit more to feed their families?

Shane:
Yeah.

AJ:
Let's dip into profits a wee bit.

Shane:
My takeaway from this is that, the union organizer, when told that he was not articulate or smart by the General Counsel of Amazon, put a guillotine outside of Bezos's BC mansion, which I find to be incredibly cool. He's got 220 billion, that's a lot of hitman. You got to be pretty ballsy. Or just one really expensive one.

AJ:
How much does the hit cost? You're assuming a hit cost a million dollars?

Shane:
That's what I'm saying. It doesn't. But for the sake of rounding, I think they cost like 15 K. I don't know how I would know that, but I think it's around there. But you have full time, just on salary. Just around.

AJ:
Do you have Liam Nissan, just chilling at all times, ready to go?

Shane:
Might not have much work to do, 248 days out of the year.

AJ:
Or, what's his name? Who's the guy that my husband's obsessed with him? Jason Statham.

Shane:
Yeah. Statham, he probably needs more than a million dollars, but if he wasn't famous... All right, we're good here.

AJ:
I'll ride in my Escalade [inaudible 00:23:29].

Shane:
All right. We've got a few more minutes till the dogs upstairs lose their minds. What else do you want to cover?

AJ:
Oh, we have a listener mail question. This came from a friend of the firm. "I didn't know an underwater stock option. I did not know that underwater stock options were a thing. Can you please explain?" So, underwater stock options are when you take your stock options grant and you jump into your...

Shane:
I know you're not about to do this.

AJ:
Jump into your swimming pool. And you cry because you don't understand your paperwork.

Shane:
Okay. Wow. Do you want an adult to explain those underwater stock options? You think that joke's great?

AJ:
No, it's not. It's so good that I laughed in the middle of it. I couldn't finish it.

Shane:
When you get into a submarine with your laptop.

AJ:
No, underwater stock options are when you have a grant of stock options, which remember, is the option to purchase shares at a certain price. And that's-

Shane:
Hold on. I find this incredibly important that we recognize that we have not gotten this question forever until there's volatility in the stock market, thanks to the Russia-Ukraine war, because the stocks have only gone up since 2012.

AJ:
That's true.

Shane:
So we're on one of the longest bull runs of all time. So stock price... I'll let you keep going.

AJ:
Yeah. So it's your option price. You can buy this stock at this price that it says in your grant, but guess what? The stock has not performed that well. So the stock price has actually gone down, not up. So the value of your option, it's worthless because you don't want to... Stock is trading right now. Let's, say your option is $20 to purchase it. Your $20 strike price. Now the stock is trading at $10. You could go out to the open market and buy that stock for $10. So who in their right mind would want to lock in an immediate $10 loss? So that's an underwater stock option.

AJ:
We have quite a few clients with underwater stock options right now. We see these really volatile stocks. They get grants when the stock was at its all time high or it's 52 week high. And now it's worthless. And at that point, it's really a moment for companies to decide, what are they going to do? They can't keep dishing out equity compensation. How are they going to retain these employees? And a firm that's really felt this is none other than the artist formally known as Facebook or Meta, FKA, Facebook. Facebook's had a rocky ride over the past two years.

Shane:
FKA, Jesus.

AJ:
I'm going to make a bet with you that if you lose, you're going to have to get a tattoo somewhere that says FKA, Facebook.

Shane:
Mm-mm (negative). Going to take a lot of substances for that one.

AJ:
Anyway. Shares have plummeted, Facebook gives out stock options. So employees are mad. They're like, "Why should I stay here?" So New York-

Shane:
[inaudible 00:26:23] New York at Facebook. I'm definitely wrong about this, but you would have to pay me so much money to work for that terrible company. And I am sure a lot of people feel the same way. So when you're working, you're essentially selling your soul. You're exchanging it, which we all come across. Everyone has a price. The people that have paid their price over the past few years, or suddenly the price has changed by the market, due to this Meta investment. And now they're just rethinking what it's worth to them to have to tell to admit to their friends that they work at this company. So there's this fallout, people are bailing? Is that what's happening?

AJ:
Yeah. It's like, I work here. I was told I was going to be making X. I was told that I was going to get X in salary and 50% of my compensation or 25% of my compensation was going to be in these valuable stock options that were going to go up in value. But guess what? The stock price went down, so now the options are literally worthless. So what's the incentive to stay at that point? So there's some pretty good quotes here from the corporate message board. "Joined Meta after, at near all time high, now feeling like shit." One Meta employee said this week in a popular thread on Blind, a corporate message board filled with verified members, "What should I do?" Someone else chimes in and says, "Leave this crap place," another Meta mate responded.

Shane:
I love Meta mate. I have a personal underwater stock option story to help frame this. So my dad worked at a casino and to that, worked for casinos for a long time. I like to tell sob stories about my family, but I grew up in a fantastic family. Very nuclear, very classic. And my dad worked at casinos. And in 2007 to 2008, he got a big promotion and he was granted stock options at MGM at $100 per share. While it's trading at a $100, he's thinking, "All right, hopefully it goes up to 110, 120." This is in the roaring market of 2007. People are buying homes, the market's going crazy a little bit too inflationary, or in terms of expansion of the market.

Shane:
And then there's the crash, right? And when people don't have money, because they lost their jobs, the last place they go is a casino. So the value of MGM shares went from a hundred dollars to $10 per share. So my dad had the lovely option of purchasing shares that were worth $10 for a hundred dollars. There you go. And this is happening with these super high growth companies that three X in value every year, every two years, when you're growing that fast, it's like you're playing with house money and people want to pull chips off the table due to some volatility. They're going to take it off their biggest winners most of the time first. That's not a fact and that's not investment advice, but it's no surprise that people are cashing in some of their chips on some of these super high growth companies that rely on continued stability to continue grow so quickly.

Shane:
So they might be down to, they probably have a mixture if they were granted multiple options over different time periods, they have some shares that are underwater, because they got them more recently. And the stock price is dipped past that recent high, but their older shares, the longer you, the billionaires are like the multi that we see from our client base is usually because they've worked at a tech company for a long period of time, at least two, three years. The biggest winners are always the ones that have worked at a company for like eight or nine years. Right. And it's just been on a steady growth trajectory for so long. And you've got so many shares from back in the heyday when there was less than 500 people working at this company that now has, 5,000 or whatever.

AJ:
Yeah. It sucks. Under the sea

Shane:
Under the sea.

AJ:
That's all I got.

Shane:
[inaudible 00:29:59] it's wet. I'll take it from me.

AJ:
Take it from me.

Shane:
You can't just casually pop my favorite Disney song into the pocket.

AJ:
Well with that folks, we leave you. Thanks for being fabulous audience. This has been a liquidity event. We're a and chain liquidity of or Brooklyn ffi.com/episode 38 show it's there. See you next week. Pace.

Speaker 1:
Thanks for listening to the liquidity event, hosted by AJ and Shane of Brooklyn. Fi head on over to Brooklyn fi.com where you can subscribe to the podcast or YouTube channel, or if you want to learn about their full service, financial planning tax and investment firm, specializing in tech professionals and creatives on the path of financial independence. We'll see you next time on the liquidity event.