Employee Stock Sales Boom, As Square Considers One at $5 Billion

Across Silicon Valley, employees are cashing out.

For years, the Valley's conventional wisdom has held that allowing employees to sell some stock before an initial public offering would reduce their drive and hurt retention. Sales began happening anyway, but behind employers' backs on the secondary markets.

But there has been a behind-the-scenes explosion of secondary offerings being encouraged by the top ranks at these companies. Leaders at Square have been talking to investors about funding a tender offer for employee shares that would value the company at around $5 billion, according to three people familiar with the company’s thinking. And dozens of private technology companies, including SpaceX, Evernote, SurveyMonkey and WordPress creator Automattic have been helping employees sell their stock as well, sometimes regularly.