Concept-of-the-week
Stock Appreciation Rights (SARs)
Stock Appreciation Rights (SARs) give employees the economic benefit of equity ownership without requiring the company to issue shares.
An employee granted 10,000 SARs at a $10 grant price per SAR pays nothing upfront. If the company’s stock later rises to $40, the employee receives $300,000, representing the $30 increase in value multiplied by 10,000 SARs. That appreciation can be settled in cash or stock; the employee receives only the increase above the $10 grant price.
How that appreciation is settled determines the accounting and the company’s exposure. Cash-settled SARs are recorded as a liability and remeasured at each reporting date, so a rising share price increases the liability and reduces reported earnings. Stock-settled SARs, by contrast, are recorded as equity and do not create the same earnings volatility from remeasurement.
What we’re watching
Emerald AI raised $150 million in a Series A at a $1.05 billion valuation
Emerald AI raised $150 million in an oversubscribed Series A financing at a $1.05 billion valuation. The round was co-led by Energize Capital and DCVC, with participation from leading financial and strategic investors. The company now counts 12 Fortune Global 500 companies as investors.
The financing brings Emerald AI’s total funding raised to more than $220 million. The company said it will use the new capital to scale commercial deployments of its power-flexible AI data center technology worldwide.
Source: Businesswire
This week’s highlights
Lambda in talks to raise up to $3B pre-IPO, investors undisclosed (Source)
Castelion raised $1B Series C at $13B valuation, a16z lead (Source)
Poolside AI raised $1B at $6B valuation, Nvidia lead (Source)
Fractile in talks for $600M at $6.5B valuation, investors undisclosed (Source)
General Intuition raised $320M at $6B, Valor + Point72 lead (Source)
See you next week,
Team EquityList
