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| Employer Stock Options Posted by Chazz Reinhold If an employer offers a 5% discount to purchase company stock, but the stock never moves very much ($35-40 over the past few years), is it a good or bad investment? Would you do it just to have for the future or not worry about it? on 5/9 at 7:03 amReply • Back to Top |
quote: Are you asking whether it *is* a good investment, or *was* a good investment? We know enough to answer the latter question but not really the former. Generally speaking though, it's free money and you should take it. The problem is that 5% is not very good compared with most such stock plans. But like I said it is free money. Reply • Back to Top |
| 5% isn't that good I know. I just don't see it ever taking off. Reply • Back to Top |
quote: Is there a dividend yield? Also, can you buy in and then immediately sell out? Reply • Back to Top |
| Sounds like your talking about an ESPP (employee stock purchase plan) rather than "Options." At my place of employment, we get a 15% discount AND at the end of each 6 month period we purchase at the lower of the stock price on Jan 1 or Jun 30. So if it was $10 Jan 1 and closed at $20 Jun 30, we would use our previously withheld money to purchase shares at $10 less 15%, so $8.50. And instantly in that case you have over a 100% return b/c the stock is trading in the $20's. I always participate, and you probably should too...even if I plan to sell immediately after I get my shares and take the 15% return (albeit it is an disqualifying sale and is taxed as ordinary income). The only risk is the time it takes to have the shares available for sale after the 6-month period. If it cuts off June 30, you might not get the shares deposited until say July 20. For those 20 days....you are at full risk. Reply • Back to Top |
| It is an ESPP. I am new to it so I don't know much about it. Reply • Back to Top |
quote: Find out more, then come back and bump this thread. Reply • Back to Top • Refresh |
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on 5/9 at 8:07 am to