How to Value Stock Options How to Value Stock Options Posted 9 Apr 2001 by Bram Many of you will one day receive a significant chunk of your pay as stock options.
Most people guess how much stock options are worth by rank speculation, usually assuming 'a lot'.
Now that the stock market is well and truly busted, you may be interested in a more sober approach. Someone else might value them quite differently, but you aren't that person, so it doesn't matter. The following is a good rule of thumb, followed by an explanation of all the values in it. Chances are, some investors have already put money into the company, and you should use their valuation. If there's been no such investment, take the amount of money which has been put into the company so far and multiply by what's been accomplished.