Facebook employees get screwed by recession

A market downturn hurts a lot of employees at public companies. They get stock options, but as the shares in their firms drop, the options become worthless. A Google (NASDAQ: GOOG) engineer may watch options he got at $400 move "out of the money" as the stock goes under $300. But, that is life at a listed corporation.

Facebook, the big social network site, is not public. To get employees some cash, it set up a program so that they could sell some of their shares. Maybe a little money for the holidays.

According to The Wall Street Journal (subscription required), "Facebook Inc. is delaying a previously announced program to allow employees to sell some of their shares in the privately held company, citing the "incredibly difficult" global economy." The company was valued at $15 billion earlier this year when it sold a part of itself to Microsoft (NASDAQ: MSFT). The employee stock sale plan put a $4 billion price tag on Facebook. In the current environment is may not be worth even that much, which could be a cause of the cancellation of the program.

It used to be that having a job at a "hot" private company was a tremendous deal. Eventually, the firm goes public at a ridiculously high value. Workers become millionaires. What a great life. At Facebook, the day of the big pay-off may never come.

Douglas A. McIntyre is an editor at 247wallst.com.