To copy paste what I posted earlier, here's more detail: There seems to be confusion about this so let me try and explain - the rules are different for a private company and a public company and heres why (super over simplified): A public company is value by everyone and anyone since anyone can buy shares. But a private company valuation is decided in meetings between current shareholders and potential investors.

If everyone who owns shares in a private company decided to sell their shares at whatever price they wanted (like your shares might be worth $100 per share but you sell them your friend Frank for $80 because you want the money) then investors will demand a lower valuation - they won't fund the company at $100 per share when Frank is getting a better deal behind their backs.

Selling shares in a private company DECIDES the valuation of the company from there on. So... you have strict rules as to when you can sell shares and it's always done as a company decision - everyone has to agree to sell - would you not be pissed if you lost half the value of your shares because someone decided to sell their shares at half price? HOWEVER, in a lot of cases companies are decent and people/colleagues will buy you out becuase they believe in their company and becuase you want out. But this does allow assholes to 'trap' people which is what it looks like Uber is doing.

Put it simply, you start working for Uber and your shares are worth $1M, you leave after 2 years, and now those shares are worth $100M. But you never actually got the shares - you got the OPTION to buy the shares (hence 'stock options') So when you leave, you have to decide, do you want to buy $100M worth of shares at the price of $1M which is what you started with. OF COURSE YOU WOULD - you're making $99M!!! - Except not exactly. You have to pay taxes on that $99M because thats profit you've made right? And that's A LOT of tax. BUT you have to get permission from Uber to sell those shares because it's private company. If it's a public company - no problemo, you sell the shares (after the lock out period and that's a whole another thing for another time) and you pay the taxes and go straight to Gulfstream offices to buy your private jet. Uber is not being nice and not giving permsion - hence the issue. That being said, it is getting a lot easier to sell private shares.

That is the short version.