Employee stock options create new millionaires in Israeli high-tech startups
While Wall Street hasn’t been too healthy in the last week, with an overall drop in NASDAQ, Dow Jones and S&P 500, several Israeli high-tech companies have outperformed the market, earning employees big profits.
In a recent report by Calcalist, twenty Israeli companies traded in the US who had already published full financial reports for 2013, or who only launched in 2013, have earned their employees a combined sum of over half a billion dollars. If the employees were to exercise their options, the companies themselves would pull in over 1.2 billion dollars, with the majority of that sum, $808 million, going to the Israeli pharmaceutical giant, Teva.
One of the most successful of the new Israeli companies traded on NASDAQ is Redhill Biopharma, a bio-pharmaceutical start-up which saw a 40% rise in its value in the last three months after announcing an exclusive partnership with Salix for production and distribution of a new bowel cleansing product. They also plan to announce the results of two further experimental products later this year. Their success has earned managers and staff at Redhill over $11.6 million, almost certainly creating some happy new millionaires among them.
Wix.com, an online website development platform launched this year, has seen its value rocket since its launch, and its employees have earned an average of $206,000 each from their stock options. Some companies, most notably Teva, gives employees restricted stock units (RSU), which they can only exercise under certain conditions or after a certain amount of time.
Other Israeli companies will release their figures for 2013 soon, probably with similar results. The question remains as to whether the employees will manage to turn these theoretical gains into real profit before the market turns.