Graphics chipmaker Nvidia on Thursday offered to buy back currently worthless employee stock options for $3.20 per share to ease the pain of a steep drop in the company's market value.
Employees who accept the offer will receive the payment in Nvidia common stock that will fully vest after a year.
The plan, which will cost Santa Clara-based Nvidia up to $66 million, is designed to lift the spirits of employees whose once valuable stock options have been wiped out in the past nine months.
After quadrupling in value during 2001, Nvidia's shares have plummeted by 87% so far this year. The drop has wiped out millions of stock options priced above Nvidia's closing price of $8.87 Thursday on the Nasdaq Stock Market. Investors have soured on Nvidia's stock as its once rapidly growing sales have decelerated in a punishing high-tech slump.