[ntucker]

Since the spread between the strike price and the current market value gets a tax treatment like income, it can pay off to exercise options early if you want to hold the stock and are confident the price is going to go up. He just paid $3.5M for stock that is worth $102M, so he's got to pay taxes on about $98M of something income-ish.* If hypothetically he waited and the stock doubled, he'd have to pay tax on a much larger spread.

* I say something income-ish because whether it's actually called income depends on the option type and AMT complexities that I can't really rattle off off the top of my head, but suffice it to say the spread is taxed in a very income-like way.

[abalone]

Right, that's what I was getting at with the capital gains treatment. I also am not sure off the top of my head, but at the very least any gain from here on out is going to taxed at the capital gains rate (20%), assuming he waits a year or two.

I just feel there's more to it than some tax savings given the massive amount of capital it requires ($50M!), which could be more productively invested. I'm guessing those options are expiring and/or it's a PR boost.