Gurley argues management treats stock-based compensation as free while being more thoughtful with cash, but shareholders see it differently.
“I personally think management is a lot more, thoughtful about cash expenditures, and I think they think about this SBC as if it's free almost. Mhmm. But I don't think shareholders think that way.”
Gurley calls for discussion about how much stock actually needs to be given away for company success.
“And so I'd love to see more discussion about that. I think it really ask a a very important question about how much stock actually needs to be given away to make these companies success.”
Gurley says Netflix executives choosing cash over stock shows management treats SBC as if it's free.
“And I personally think management is a lot more, thoughtful about cash expenditures, and I think they think about this SBC as if it's free almost.”
Gurley argues management treats stock-based compensation as if it's free, unlike cash expenditures which get more scrutiny.
“I personally think management is a lot more, thoughtful about cash expenditures, and I think they think about this SBC as if it's free almost.”
Gurley notes Instacart's stock-based compensation is a fraction of other tech companies, calling high SBC very dilutive.
“Their stock based comp is a fraction of all the other companies in the space and all the other tech companies.”