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re: Company stock @15% market discount
Posted on 8/3/13 at 10:54 am to Beerinthepocket
Posted on 8/3/13 at 10:54 am to Beerinthepocket
How confident are you in your company to grow and create more value in the next couple years? If shares remain flat over two years, you make 15%. (12%-13% adjusted for inflation)
1) Case 1: Buy shares at $85 on 1/1/13 (15% discount from market price of $100/share). Tough couple years, and on 1/1/15, shares are trading around $90/share. You've made about 6% over two years which is ok, but maybe you could have made more somewhere else.
2) Case 2: Company's shares remain flat at $100, could you have put your money somewhere else for two years and made more than 15%? (probably not)
3) Case 3: Company's shares increase 15% over two years and you sell at $115 and you've made about 35%. You killed it, and there's unlimited upside (maybe the company's equity appreciate more than 15%)
Also, does the company pay a dividend? If so, just makes it a sweeter deal.
1) Case 1: Buy shares at $85 on 1/1/13 (15% discount from market price of $100/share). Tough couple years, and on 1/1/15, shares are trading around $90/share. You've made about 6% over two years which is ok, but maybe you could have made more somewhere else.
2) Case 2: Company's shares remain flat at $100, could you have put your money somewhere else for two years and made more than 15%? (probably not)
3) Case 3: Company's shares increase 15% over two years and you sell at $115 and you've made about 35%. You killed it, and there's unlimited upside (maybe the company's equity appreciate more than 15%)
Also, does the company pay a dividend? If so, just makes it a sweeter deal.
This post was edited on 8/3/13 at 10:56 am
Posted on 8/3/13 at 11:40 am to raw dog
Thanks guys. Not sure about any company dividend. I know they just keep rolling it over and buying more stock until we sell. I am contributing 11% now to the 401k that has nothing to do with the company other than them matching half of what we put in up to 6%. So there is free money I make there. Just to start and see how it works , I'm currently investing 4% into the company stock option. It's a total of 15% of my pay coming out for stock and 401k. I'm not anywhere close to an "OT Baller", just looking for an easier life later on.
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