It’s not often that you get to applaud a CEO for getting his company a tiny valuation, but that’s what we’d like to do for AOL CEO Tim Armstrong.
An industry source described AOL’s low valuation (~$3.2 billion) as a “great piece of internal salesmanship” by Tim.
Because a low valuation:
- Sets a very low strike price for AOL employees’ new options, which will help the company retain talent.
- Assures AOL stock is more likely to grow out of the gate
- Generally sets lower expectations for a turnaround.
- It makes it easier for Tim to sell the company at a premium a year or so from now.
Way to go, Tim!