Last Call For Silly Conned Valley

Looks like the same game of musical chairs that dot.com era tech companies played fifteen years ago when I was a college puke haven't changed a bit in the age of the "sharing economy". Meet the suckers employees of Good Technology, a mobile security tech firm bought out by Blackberry. While the founders and investors made millions, the employees paid in common stock were destroyed, because after all, some games are just that old.

What Good’s employees experienced is an example of who loses out when a company backed by venture capital goes south. While plenty of people — including founders, top executives and investors — are involved in the rise of a start-up, those hit the hardest during a company’s fall are the rank-and-file employees. 

Investors and executives generally get protections in a start-up that employees do not. Many investors have preferred stock, a class of shares that can come with a guaranteed payout. Executives frequently get special bonuses so they will not leave during deal talks. 

In Good’s case, the six investors on the board had preferred shares worth a combined $125 million. After the sale to BlackBerry, Ms. Wyatt, who has since left the company, took home $4 million, as well as a $1.9 million severance payment, according to investor documents. 

In contrast, start-up employees generally own common stock, whose payout comes only after those who hold preferred shares get their money. In Good’s case, the board’s preferred stock was worth almost the same as all 227 million common shares outstanding. 

Missing out on the upside of the sale was bad enough, but that wasn’t the half of it. Some Good employees actually lost money when BlackBerry bought the company. Good was a “unicorn,” that is, a private company with a valuation of more than $1 billion. The high valuation increased the paper value of employee shares — and thus the income tax bills levied on their stock when they received the stock grants, or when they bought and sold shares. To pay those taxes, some employees emptied savings accounts and borrowed money. 

Some of Good’s common shareholders have sued most of the board for a breach of fiduciary duty, asserting that directors looked only after the interests of preferred shareholders. 

“It’s not unusual for employees to be wiped out while venture capitalists make money,” said Dennis J. White, a partner in Boston at the law firm Verrill Dana, who has studied deals like Good’s.

So yes, the rules were that they paid capital gains taxes for shares that were at the time valued at ten times what they ended up being worth when the company was bought out, and since these were the little peons, they didn't have the loopholes and tax shelters.

Imagine paying taxes on 100,000 common shares being valued at $4 a share. That's $400,000 in stock value, automatically putting you at the top 15% capital gains tax rate for a healthy chunk of it.  No big deal, so you pay $60,000 in taxes now on $400,000 worth of stock that will go up up up when the company goes public.  Even if the stock only goes from $4 to $5, you've more than made that money back and you're pretty well off.  Should the stock shoot up to $20, $40 or more, you're a tech multi-millionaire.

But the employees at Good paid 15% taxes on $4 a share and the company was sold out from under them for a tenth of that price, meaning basically everyone lost money.

And in some cases, they lost tens of thousands of bucks or more.  Imagine you actually owed 20 cents in taxes for every share you had.  Now imagine you had a million shares.  $200,000 in the hole, bam.

Saw a lot of that 15 years ago.  People didn't learn then.  They know even less now.

Merry Christmas, right?

White America, Black President, Green Lantern

Isaac Bailey is a black columnist for the Myrtle Beach Sun-Times, and he takes to Politico Magazine to give us yet another hot take on why Obama is the one who has to fix racism of Trumpmerica.

This task can’t be left to pundits, academic experts or even preachers, rabbis and imams—particularly as long as Trump continues to tap into the darkest recesses of people’s souls. Destructive groupthink can overcome even the most sincere efforts of community leaders. It cannot be left up to other 2016 presidential candidates, either. They’re far too busy trying to win the White House to be healers. 

There is only one person who can unite the country again, and he works in the White House. Yes, President Barack Obama—ironically, the man who is the personification of the fear Trump is exploiting—is the one in the best position to quell the anger being stirred up. 

This is not something the president can do from the Oval Office, or from a stage. What he needs to do is use the power of the office in a different way, one that matches the ruthless effectiveness of a demagogue with a private jet. Obama needs to go on a listening tour of white America—to connect, in person, with Americans he has either been unable or unwilling to reach during his seven years in office. 

I know the difficulties of such outreach, and also its unique payoff. I‘m a black man who has spent the past decade listening to white Southern conservatives—people who many assume would hate me. Because of that, I’ve been able to get through to people others wouldn’t dare try to reach. I have the battle scars and rare friendships to prove it, including one with a member of the Sons of Confederate Veterans who may help me in a criminal-justice reform push. 

The conventional wisdom might say the current U.S. president should visit places like Chicago and Ferguson, where decades-long racial disparities are at the heart of recent bouts of unrest. Or that he should visit San Bernardino and offer condolences in person (which he did before going on vacation), as he’s done so many times after so many mass shootings. Or maybe Detroit, a city still struggling even after a massive bailout saved the domestic auto industry. 

I say, instead, he should first go to places like Conway, South Carolina, where a Democratic president has nothing to gain, a place whose residents daily drive by an electric plant that is now empty in part because of environmental policies that may indeed be necessary to save the planet but hurt real people in real time, nonetheless. 

Or maybe he can map out a path along the Appalachian Trail and visit cities and small towns full of people who believe they’ve been left out of the American dream and forced into a nightmare they are convinced they can survive only by clinging to their God and their guns, which is why they balk at the emergence of legalized same-sex marriage and talk of gun control, not because they hate—even if the words they sometimes use sound hateful—but because they still need something to call their own. 

Let them see their president. Let them speak directly to their president. Let them shout, cuss, fuss and unload if that’s what they need to do. Because no matter how you slice it, the country they’ve long known is dying, and a new one is taking shape. Obama’s presence in the White House, while heartening to many, is the tip of the spear to those fretful about what’s to come.

To Mr. Bailey, who no doubt has good intentions, and in a perfect world would have a point, I say this:

After seven years of this, what on God's green Earth makes you think angry white America wants to listen to our President?

You say the President needs to go places where he has nothing to gain.  I say that if there was something to gain, to educate people, to assure people, to help people, these folks would not accept any of that.  All they know is hatred, anger and fear, and pablum like this enables that hatred, anger and fear.

Worse, it blames this conscious decision by racist assholes on the President, and absolves them of the responsibility of their actions.  It's infantile and stupid.  These folks don't like same-sex marriage being the law of the land?  I can understand that, but guess what?  They still have to follow it.

What these people want is to bully, threaten, and even kill their way into having "their" country back.  I got news for them, it's our country collectively, not yours alone.

No, we don't have to listen to racist cracker assholes.  The country has moved past them.  They're sad and angry and hateful they've been left behind?

Screw em.  I have better things to do than worry about the tender feelings of racist idiots.

Look, here in Kentucky, we just had an election where these same people rejected health care for their families for tens of thousands of people. Our governor just disenfranchised tens of thousands more voters and made sure thousands more would continue to earn just $7.25 an hour.  They voted against Obama, plain and simple.

They actively harm themselves and others just to not listen to Obama.  That is how deep their hatred goes.

And you want Obama to reach out to them?

Go to hell.

Naming The Elephant

Slate's Jamelle Bouie asks the obvious question about Donald Trump: is he benefiting from the Republican's massive racist backlash against President Obama directly, or is the media narrative of "working-class populism" the truth?

There is no question that Trump has run the most unapologetically racist and nativist campaign since George Wallace made his first national play in 1964. And, like Wallace before him, it’s been successful, drawing tens of thousands of people to massive rallies across the country. Trump probes their fears, excites their passions, and gives them voice in a way they love and understand. “We have losers. We have people that are morally corrupt. We have people that are selling this country down the drain,” Trump declares.

These voters may feel anxious about their economic status. But they also hold racial and cultural resentments. They’re worried about their futures and they dislike immigrants, Muslims, and blacks.

On Monday, the Washington Post looked at the white supremacists and white nationalists who cheer Trump as an asset to their movement. Trump has opened “a door to conversation” and “electrified” some members of the movement, says one leader in the Ku Klux Klan. “I think a lot of what he says resonates with me,” says David Duke, a “Grand Wizard” in the Klan and former Louisiana politician.

In a similar piece for the New Yorker, writer Evan Osnos spoke to Jared Taylor, a prominent white nationalist who described the situation as such. “I’m sure he would repudiate any association with people like me,” said Taylor, “but his support comes from people who are more like me than he might like to admit.”

These voices are self-serving, but that doesn’t mean they’re wrong. Trump has shot to the top, fueled by vicious rhetoric against Latino immigrants and Syriain refugees. He has shared racist memes about black Americans and called for a ban on Muslim travel to the United States. And each time, his support ticks higher.

Economic anxiety plays a part here. But maybe Trump has discovered something we all like to deny: That in the 21st century, the racist vote is larger, louder, and more influential than we ever thought.

Not racist, the joke goes, just number one with racists.

And after years of racism and bigotry being directed at Barack Obama, of course whoever wins the GOP nomination in 2016 would be the heir to this 50-state Southern Strategy.  Romney wasn't able to dog whistle his way into it, being too cute by half got him into trouble with his campaign-ending "47 percent" remark.

Donald Trump does not have this problem.  He's outright racist, overtly disgusting, loudly and proudly bigoted, and he knows our media will bend over backwards showcasing him as a regular guy, they have no choice. He knows the game better than they do.

But yes, the last remnants of the Confederacy have long been with us and always will be.  Trump tapped into them on purpose and by some measures he's above 40% in the crowded GOP field, and every awful weekly tirade only adds another two or 3 points to his total.

If you're suddenly expecting "undecided" Republicans to stand up to him after he starts winning primaries, you're deluded.  Trump is looking more and more like the GOP pick, and he will absolutely get 45% of the vote, minimum, against any Democrat next November.

Watch.

StupidiNews!

• At least three people were killed by tornadoes in northern Mississippi overnight as powerful storms slammed through parts of the South and Midwest.
• A new study finds that American Christmas lights account for more energy use by themselves than some of the poorest countries use in electricity all year.
• Illinois has become the third state to classify daily fantasy football leagues as illegal gambling, both FanDuel and DraftKings are expected to appeal.
• Cable television bills are expected to rise on average by 4% in 2016 as cable providers are blaming the increase on broadcast and sports network contracts.
• "Merry Beatlesmas" as the iconic band's full catalog will finally come to streaming music services for the first time today.