Former Uber employees took out loans to exercise options that they still can’t sell — Quartz

Uber employees are lining up to sell their stock to Japanese technology giant SoftBank, which will buy up to 17% of outstanding shares for $33 each. The price represents a 30% discount to Uber’s last valuation, of nearly $70 billion, but for current and former employees, the SoftBank tender offer is a rare chance to convert paper wealth into actual cash.

“Everyone’s been reconnecting to discuss the tender offer,” Lane Kasselman, a former communications lead at Uber, told Quartz. “A lot of the former employees have been waiting two to four, even five years, to see liquidity, so it’s pretty exciting.”

To qualify for the tender offer, participants must have at least 10,000 Uber shares and be “accredited investors,” an SEC designation (pdf) for wealthy individuals. Current Uber employees can’t sell more than half of their stake; there are no restrictions on former employees. The deal is on the table until Dec. 28, and could fall through if there aren’t enough shares on offer for SoftBank and a small consortium of other investors to purchase at least a 14% stake in the company.

Working at a successful startup is often viewed as a quick path to prosperity, but the reality is more complicated. Startups tend to offer equity packages, typically in the form of stock options, to compensate for below-market salaries. But as companies like Uber have stayed private longer, most employees haven’t been able to get rich from those shares. Quite the opposite, some former Uber employees have gone into debt to hang onto shares they still can’t sell.

Two former Uber employees, both of whom left the company in 2016, told Quartz that Uber gave them just 30 days after departing to exercise their options. One of those former employees paid about $100,000 to exercise more than 20,000 incentive stock options (ISOs), plus a tax bill of over $200,000. The other paid about $70,000 to exercise about 5,000 ISOs, and then about $160,000 in taxes. Both former employees took out loans from family members to make the payments, and requested anonymity to discuss their personal financial situations.

Uber, founded in 2009, is the world’s most valuable technology startup. From 2013 to 2016, the ride-hailing company’s valuation climbed from $3.5 billion to nearly $70 billion.

“It makes you start thinking, is this a real bubble, around Uber?” one of the former Uber employees told Quartz. “Everyone I know, when they were in this situation, really thought about leaving their shares on the table, because it was so much money out of pocket.”

Under current tax law, the income from exercising ISOs, a special type of option typically reserved for executives and senior employees, falls under an alternative tax calculation designed to prevent high-earners from using deductions to avoid paying tax. Non-qualified stock options, more commonly awarded to regular employees, are taxed the year they’re exercised on the gain in the stock.

Andrea Coombes, investing and retirement specialist at personal finance site NerdWallet, calls this the “dark underside of the stock-option dream.” “Potentially they can be worth a lot of money to employees,” she said. “But as an employee who’s holding stock options and hasn’t yet exercised, it’s smart to think of those as a potential benefit, not necessarily money in the bank.”

Until this year, Uber gave former employees 30 days to exercise their options, an unusually short window of time. Options that weren’t exercised by former employees before they expired were reabsorbed by the company. Uber changed its policy (paywall) in the spring so that former employees now have up to seven years to exercise their options.

Uber prohibits the sale of its shares on so-called secondary markets. Employees who have been at the company for at least four years can sell up to 10% of their holdings back to Uber at a discount, though not one as steep as what SoftBank is currently offering.

Uber declined to comment.

Travis Kalanick, Uber’s co-founder and former chief executive, famously said he’d take the company public “as late as humanly possible.” Dara Khosrowshahi, Uber’s CEO since late August, has said he’d like Uber to go public by 2019.

iPhone 8 helped Apple sell 40% more smartphones in China last quarter

While U.S. customers may be indifferent to the new iPhone 8, it appears to be a different story in China. As a result, Apple saw its first in increase smartphone sales in that critical market after an 18-month losing streak.

According to a report from Canalys, sales of iPhones rebounded this quarter, growing 40 percent to 11 million from 8 million for the same period a year ago. The research firm noted that Apple had posted year-over-year declines in iPhone sales for the Chinese market over the previous six quarters.

Canalys attributed the turnaround to the iPhone 8. It said the new version accounted for a higher proportion of sales this year than the iPhone 7 series did at the same point last year. In the U.S., reports have indicated that the iPhone 7 remains more popular with shoppers so far.

The news is a hopeful sign for Apple, which once saw the Chinese market as a massive engine of growth. Over the past two years, Apple sales have stalled there despite big investments in the region. Instead, local brands that sell Android-based smartphones have dominated sales growth in China.

Canalys remains bearish overall about Apple’s prospects in China. The firm isn’t convinced Apple can sustain this new momentum and said price cuts to older models have helped temporarily. But while there is keen interest in the iPhone X, the high costs and limited supply means it won’t be a big factor in sales for this current holiday quarter.

“Apple’s growth this quarter is only temporary. The high sell-in caters to the pent-up demand of iPhone upgraders in the absence of the iPhone X. Price cuts on earlier models after announcing the iPhone 8 have also helped. However, Apple is unlikely to sustain this growth in Q4,” said Canalys research analyst Mo Jia in statement.

Just as problematic is that the overall Chinese handset market is weakening. Canalys reported that Chinese smartphone shipments fell 5 percent in Q3 2017 to 119 million units.

In terms of market share, the three top brands are Huawei (19 percent), Oppo (18 percent), and Vivo (17 percent). Huawei saw an increase of 23 percent to 22 million units, emphasizing just how far behind Apple has fallen. Oppo shipped 21 million, and Vivo sold 20 million.

Apple founder Steve Jobs’ iconic sports car to sell for £300,000 – complete with vintage Motorola phone

Apple founder Steve Jobs’ old BMW convertible is expected to sell for £300,000 at auction – and it comes with the original car phone used by the tech pioneer.

The billionaire inventor bought the limited edition Z8 brand new in 2000 and it has averaged less than 1,000 miles a year since then.

Jobs was a big fan of German car design and bought the super coupe after the same model was famously used by actor Pierce Brosnan in the James Bond film The World is Not Enough.

It is considered one of the most innovative and attractive cars of the early 21st century and is regarded as a modern classic.

Jobs’ Z8 was delivered on October 6, 2000, in his signature minimalist style and colour, finished in titanium over black leather interior.

The iconic car is set to go on the auction block in December

Jobs’ old Z8 comes with the original Motorola mobile phone

The same model was featured in the James Bond film The World is Not Enough

The car was registered to Steven P Jobs in California

He kept it for three years and its current owner is now selling it through RM Sotheby’s in New York on December 6. It is expected to sell for £300,000.

The Z8 has been driven just 15,200 miles in its 17-year life and has a number of accessories including its hardtop roof, car covers, manuals and its BMW-branded Motorola mobile phone, used by Jobs.

Don Rose, car specialist at RM Sotheby’s, said: “Not only was the Z8 the halo car for an iconic brand and the Bond car for a generation, but it caught the eye of the most iconic and influential entrepreneur of our time.

Jobs kept the car for three years before selling it to its current owner

Accessories include the Z8’s hardtop roof and car covers

The Apple co-founder died of pancreatic cancer in October 2011

“Jobs’ legacy is all around us, with over one billion iPhones sold to date. However, he only owned one Z8, and this is that car.

“The BMW is a perfect fit within our ICONS event, while making it difficult to determine whether the icon in this case is the car or the man. I say both.”

Pulling styling cues from the classic BMW 507, the Z8 pioneered an advanced technique of welded and extruded aluminum space frame construction.

Under the bonnet is a 4.9-litre V8 engine which develops almost 400bhp – giving it a 0-62mph time of 4.7 seconds and a top speed of 168mph.

The BMW-branded Motorola mobile phone used by Jobs

Under the bonnet is a 4.9-litre V8 engine which develops almost 400bhp

The car has averaged less than 1,000 miles a year since 2000

Jobs’ ownership is documented by several service invoices accompanying the car, as well as a copy of the original California registration in his name and at his personal residence.

Experts say this is significant because Jobs rarely registered his cars to protect his anonymity, holding onto them less than six months.

He kept the BMW until 2003, when it was sold to its second and now current owner.

That person had sold the car to another tech executive in 2004 and quickly suffered from seller’s remorse, buying it back a mere 18 months later.

What if Wolfenstein 2 doesn’t sell?

Wolfenstein 2: The New Colossus is a very good game. There are just enough weapons, there is plenty of replay value, you can play it however you’d like without punishment and there is next to nothing on it or in it that feels tacked on or extraneous.

And that puts it in an awkward position after EA shuttered Visceral Games.

But those are all good things, right?

Not necessarily. But it doesn’t have much to do with Wolfenstein 2 itself.

The end of Visceral Games is largely seen, accurately or not, as a judgment on single-player games that don’t offer microtransactions or other ways for the studio or publisher to make money outside of the game’s $60 asking price.

It’s expensive to create story-based campaigns of the quality that players demand, while prices of new games aren’t going up in the same way. In fact, new games seem to go on sale faster than they ever have.

“I do think the economics of taking a single-player game and telling a very high fidelity multi-hour story get a little more complicated,” Microsoft’s Shannon Loftis told GameSpot recently. “Gamers want higher fidelity and they want higher resolution graphics.”

This is a business, and businesses need to make money. Everyone in the industry is looking at successes like Destiny 2, Overwatch, Playerunknown’s Battlegrounds, or even online modes of primarily single-player titles like Grand Theft Auto V that are setting the world on fire and they’re seeing a clear trend. Even single-player-only games are trying to find ways to shoehorn in some kind of economy that allows players to continue paying after the game has been purchased.

Size and success won’t isolate you from these industry trends, but keep in mind that developers and publishers are reacting to how people are spending their money as much as they’re trying to force a particular business model on you. Loot boxes and multiplayer modes make money because players are spending money on these models. It may not be sustainable, but there is certainly a gold rush mentality to game design right now.

So while Bethesda is likely happy with the positive reviews of Wolfenstein 2: The New Colossus, the real test is going to be whether a game with production values this high and no multiplayer to speak of can be a financial success in 2017. It won’t help that it’s going against Super Mario Odyssey and a new Assassin’s Creed game this week as well. Developers and publishers are interested in reviews, but they’ll be watching the sales information much more closely.

And if Wolfenstein 2 stumbles in terms of revenues, you can expect that funding for other single-player games will be much harder to come by in the next few years. This is a well-reviewed game in a popular franchise being released by one of the most powerful publishers in the industry. If The New Colossus can’t work as a single-player game, it’s very possible that other large publishers will see the task as being impossible.

So if you like story-based single-player games, pray for Wolfenstein 2. It may not be your cup of tea, but it’s very likely to be the canary in the coal mine for other publishers who are already looking at that sort of experience with skepticism and fear. If Bethesda can’t make the act of punching Nazis a success in 2017, everyone else in the business will suddenly become a lot more conservative about their single-player bets, and that would be a shame.