Illustration: Sarah Grillo/Axios

Silicon Valley may end up with large numbers of abandoned employee equity, as startups cut jobs amid the coronavirus-caused economic uncertainty.

Why it matters: Startup employees typically have just 90 days from the end of employment to either exercise their stock options, for which they must pay cash, or to let them go.

Driving the news: A number of companies, such as SoftBank-backed Compass, travel lodging company Sonder, and business travel company TripActions, announced layoffs in recent days.

"Paying up front out of pocket, it’s a significant amount that people just don’t have in cash," says EquityBee CEO Oren Barzilai, whose company helps finance employee stock option purchases.

  • EquityBee and Secfi, which also offers financing for employee stock options, both report a recent uptick in startup employees signing up for their services.

Between the lines: What makes these decisions tricky for newly laid-off employees is the combination of the common 90-day exercise window and the volatile economic outlook.

  • Some companies have extended these windows (e.g., Compass employees will have 12 months), but 90 days remains the industry standard.
  • According to Carta, only about 11% of startup employees have exercise windows longer than 90 days, up from about 3% in 2010. And while employees exercise more options when they can do it early, only about 15% of options can be excercised early.

The bottom line: Some workers not only are losing their jobs, but they're likely to lose part of what they earned over the past several years.

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Jeff Sessions loses Alabama Senate primary runoff

Jeff Sessions. Photo: Michael DeMocker/Getty Images

Former Attorney General Jeff Sessions has lost the Republican nomination for Senate to Tommy Tuberville in Alabama in Tuesday night’s primary runoff, AP reports.

Why it matters: Sessions had been the underdog in the race against former Auburn University head football coach Tommy Tuberville, who had the backing of President Trump. Tuberville will now face off against Sen. Doug Jones (D-Ala.) in November, who is considered to have one of the most vulnerable Democratic Senate seats in the country.

Updated 7 hours ago - Politics & Policy

Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 9 p.m. ET: 13,273,537 — Total deaths: 577,006 — Total recoveries — 7,367,106Map.
  2. U.S.: Total confirmed cases as of 9 p.m. ET: 3,424,304 — Total deaths: 136,432 — Total recoveries: 1,049,098 — Total tested: 41,764,557Map.
  3. Politics: Biden welcomes Trump wearing mask in public but warns "it’s not enough"
  4. Public health: Four former CDC heads say Trump's undermining of agency puts lives at risk — CDC director: U.S. could get coronavirus "under control" in 4–8 weeks if all wear masks.

Bank CEOs brace for worsening economic scenario

JPMorgan CEO Jamie Dimon. Photo: J. Lawler Duggan/For The Washington Post via Getty Images

Wells Fargo swung to its first loss since the financial crisis — while JPMorgan Chase and Citigroup reported significantly lower profits from a year earlier — as the banks set aside billions of dollars more in the second quarter for loans that may go bad.

Why it matters: The cumulative $28 billion in loan loss provisions that banks have so far announced they’re reserving serves as a signal they’re preparing for a colossal wave of loan defaults as the economy slogs through a coronavirus-driven downturn.