vania-janet/multiturn-rag-retrieval-data huggingface dataset:
"If by ""Company Stock"" you mean ""stock in the company I work for"" then absolutely sell your stock.  It is too big a risk to have your investments tied into the same company that is also providing your salary. If you mean stock as in general investments, I like to look at it this way.   If you have $25,000 stock and a $100,000 mortgage you ask this question: If I had a $75,000 mortgage would I borrow an additional $25,000 against my house to invest in the stock market? If the answer is yes, then you are taking a risk consistent with your tolerance for risk.   If you answer no, then your tolerance for risk says you'd be happier paying down your mortgage."
A share of stock is a small fraction of the ownership of the company. If you expect the company to eventually be of interest to someone who wants to engineer a merger or takeover, it's worth whatever someone is willing to pay to help make that happen or keep it from happening. Which means it will almost always track the company's value to some degree, because the company itself will buy back shares when it can if they get too cheap, to protect itself from takeover. It may also start paying dividends at a later date. You may also value being able to vote on the company's actions. Including whether it should offer a dividend or reinvest that money in the company. Basically, you would want to own that share -- or not -- for the same reasons you would want to own a piece of that business. Because that's exactly what it is.
Unless other people believe you have a reason for selling at a lower price, your sale probably has no lasting effect at all on the market. Of course, if people see you dump a few million dollars' worth of shares at a discount, they may be inclined to believe you have a reason. But if you just sell a few, they will conclude the reason is just that you needed cash in a hurry.
"It depends on how the program is run. If the company runs the program out of treasury stock (shares that are authorized, but not issued), then there aren't any shares being purchased on the open market.   Because of that, the share price wouldn't be affected.    If you look in your employer's annual report, you will probably find how the program is run and how many shares are issued annually under that program. By comparing that to the daily trading volume of the company's stock you can gauge whether there's any likelihood of the share price being affected by the employee purchases. That is, of course, if shares are being purchased on the open market.  For example, here is Books-A-Million's program, as described in their 2011 annual report: Employee Stock Purchase Plan   The Company maintains an employee stock purchase plan under which shares of the Company’s common stock are reserved   for purchase by employees at 85% of the fair market value of the common stock at the lower of the market value for the   Company’s stock as of the beginning of the fiscal year or the end of the fiscal year. On May 20, 2010, the stockholders of the   Company approved an additional 200,000 shares available for issuance under the plan, bringing the aggregate number of   shares that may be awarded to 600,000. Of the total reserved shares, 391,987, 373,432 and 289,031 shares have been   purchased as of January 29, 2011, January 30, 2010 and January 31, 2009, respectively. This describes an instance of the employee purchase program being run from unissued stock, not open market purchases. From it, we can tell 18,555 shares were issued during the past fiscal year.  As their average daily volume is ~40,000 shares, if the program were run from a single open market purchase, it would have potential to ""move the market"".  One would think, though, that a company running it from open market purchases would spread the purchases over a period of time to avoid running up the price on themselves."
It depends.  If you accept the offer, then your stock will cease existing.  If you reject the offer, then you will become a minority shareholder.  Depending on the circumstances, you could be in the case where it becomes illegal to trade your shares.  That can happen if the firm ceases to be a public company.  In that case, you would discount the cash flows of future dividends to determine worth because there would be no market for it. If the firm remained public and also was listed for trading, then you could sell your shares although the terms and conditions in the market would depend on how the controlling firm managed the original firm.
It basically only affects the company's dealings with its own stock, not with operational concerns.  If the company were to offer more stock for sale, it would get less cash.  If it had a stock buy-back program, it could buy more shares for the same money.  If it was to offer to acquire another company in exchange for its own stock, the terms would be less attractive to the other company's owners.  Employee stock remuneration, stock options, and so forth would be affected, so there might be considerations and tax consequences for the company.
Yes -- If you are prepared to own the stock and have the cash to buy it, it can be a good way to generate income. The downside is really no more than buying a stock and it goes down -- which can happen to any investment -- and you have the premium of the put. Just don't do it on any stock you would not buy outright. To the posters who say it's a bad idea, I would like some more info on why they think that. It's not more bad idea than any investment. Yes it has risk, but so does buying stocks in general, buying dividend stocks etc and since most options expire worthless the odds are more in your favor selling puts.
Not directly. But companies benefit in various ways from a higher stock price. One way a high stock price can hurt a company is that many companies do share buybacks when the price is too high. Economically speaking, a company should only buy back shares when those shares are undervalued. But, management may have incentives to do buybacks at irrationally high prices.
The remaining owners benefit by reducing the number of shares outstanding, so they own more of what's left. They should only do this if they think the stock is at a fair price, or below a fair price, for the company: otherwise the remaining owners are essentially giving away cash. (This actually happens distressingly often.) On the other hand, if the company's stock is depressed but it subsequently does better than the rest of the market, then it is a very good investment. The one nice thing about share buy-backs in general is that they don't have any immediate tax implications for the company's owners: they simply own a stock which is now more valuable, and can sell it (and pay taxes on that sale) whenever they choose."
First, the company only makes money on the initial sale of a share of stock; once it's in a third party's hands, any profit from further sale of the stock goes to the seller, not the company. So, it does little good to the company for its share price to soar a month after its issue; the company's already made its money from selling the stock. If the company knew that its shares would be in higher demand in a month, it should have waited, because it could have raised the same amount of money by selling fewer shares. Second, the price of a stock is based on its demand in the market, and a key component of that is scarcity; the fewer shares of a company that are available, the more they'll cost. When a company issues more stock, there's more shares available, so people can get all they want and the demand drops, taking the share price with it. When there's more shares, each share (being a smaller percentage of the company) earns less in dividends as well, which figures into several key metrics for determining whether to buy or sell stock, like earnings per share and price/earnings ratio. Now, you also asked about ""dilution"". That's pretty straightforward. By adding more shares of stock to the overall pool, you increase that denominator; each share becomes a smaller percentage of the company. The ""privately-held"" stocks are reduced in the same way. The problem with simply adding stocks to the open market, getting their initial purchase price, is that a larger overall percentage of the company is now on the open market, meaning the ""controlling interests"" have less control of their company. If at any time the majority of shares are not owned by the controlling interests, then even if they all agree to vote a certain way (for instance, whether or not to merge assets with another company) another entity could buy all the public shares (or convince all existing public shareholders of their point of view) and overrule them. There are various ways to avoid this. The most common is to issue multiple types of stock. Typically, ""common"" stock carries equal voting rights and equal shares of profits. ""Preferred stock"" typically trades a higher share of earnings for no voting rights.
As far as I know, the AMT implications are the same for a privately held company as for one that is publicly traded.  When I was given my ISO package, it came with a big package of articles on AMT to encourage me to exercise as close to the strike price as possible.  Remember that the further the actual price at the time of purchase is from the strike price, the more the likely liability for AMT.  That is an argument for buying early.  Your company should have a common metric for determining the price of the stock that is vetted by outside sources and stable from year to year that is used in a similar way to the publicly traded value when determining AMT liability. During acquisitions stock options often, from what I know of my industry, at least, become options in the new company's stock.  This won't always happen, but its possible that your options will simply translate.  This can be valuable, because the price of stock during acquisition may triple or quadruple (unless the acquisition is helping out a very troubled company). As long as you are confident that the company will one day be acquired rather than fold and you are able to hold the stock until that one day comes, or you'll be able to sell it back at a likely gain, other than tying up the money I don't see much of a downside to investing now.
"If you're risking ""everything"" by buying stock, you shouldn't be buying stock. The employees are the ones who are really at risk. Should the business go belly up, the investors are out some investment money, they'll make more; the employees don't have an income source anymore. CAT may have no legal obligation to pay better than market-wages but if they want to keep their skilled labor from going to competitors, they might want to think about it. You can't build machines without workers. If you have a good product in an established market, you can always get more investors."
Stock price is an indicator about the health of the company.  Increased profits (for example) will drive the stock price up; excessive debt (for example) will drive it down. The stock price has a profound effect on the company overall: for example, a declining share price will make it hard to secure credit, attract further investors, build partnerships, etc.  Also, employees are often holding options or in a stock purchase plan, so a declining share price can severely dampen morale. In an extreme case, if share prices plummet too far, the company can be pressured to reverse-split the shares, and (eventually) take the company private.  This recently happened to Playboy.
Should I invest money in the pre-IPO stocks soon to be offered by the   company that I work for? Is it wise to do this? What should I be thinking about? What are the   risks? The last time I was offered pre-IPO friends and family stock, I purchased half of my allotment, and had my parents purchase the other half. Since I had a 6-month blackout period, I had to hold my portion. My parents sold their portion one day after the IPO. The price went up dramatically for about a day and a half, then dived continuously. My portion ended up being worthless. My parents made a few bucks. Good for them. Not a huge deal either way, since my cost was relatively low. If I had a chance to do it again, I'd give it all to friends or family instead of splitting it, and have them sell quickly if they realized a profit. You might be luckier than I was.
"The major pros tend to be: The major cons tend to be: Being in California, you've got state income tax to worry about as well.  It might be worth using some of that extra cash to hire someone who knows what they're doing to handle your taxes the first year, at least.  I've always maxed mine out, because it's always seemed like a solid way to make a few extra dollars.  If you can live without the money in your regular paycheck, it's always seemed that the rewards outweighed the risks.   I've also always immediately sold the stock, since I usually feel like being employed at the company is enough ""eggs in that basket"" without holding investments in the same company. (NB: I've participated in several of these ESPP programs at large international US-based software companies, so this is from my personal experience.  You should carefully review the terms of your ESPP before signing up, and I'm a software engineer and not a financial advisor.)"
Having stock options means that you have worked for and rightfully earned a part of the company's capital appreciation. Takeover of the company would indicate someone is interested in the company (something should be valuable). It would be unwise to not strike before the period lapses since the strike price is always lower than market price and takeovers generally increases stock values ... it is capital gains all the way my friend. Good luck. *observations not in professional capacity. pls consult a professional for investment related advice.
Whether or not you want to abstain or throw away the proxy, one reason it's important to at least read the circular is to find out if any of the proposals deal with increasing the company's common stock.  When this happens, it can dilute your shares and have an effect on your ownership percentage in the company and shareholder voting control.
I've had stock options at two different jobs.   If you are not getting a significant ownership stake, but rather just a portion of options as incentive to come work there, I would value them at $0.    If you get the same salary and benefits, but no stock options at another company and you like the other company better, I'd go to the other company. I say this because there are so many legal changes that seem to take value from you that you might as well not consider the options in your debate. That being said, the most important question I'd want to know is what incentive does the company have to going public or getting bought?    If the company is majority owned by investors, the stock options are likely to be worth something if you wait long enough.   You are essentially following someone else's bet.    If the company is owned by 2 or 3 individuals who want to make lots of money, they may or may not decide to sell or go public.
So, if you think that holding a share of a Facebook for a long period of time would give you (at present value) 100 and that the share of the Facebook is being traded at 70, then buy it. There is another well known method, a more quantitative one, this is the Capital Asset Pricing Model. I won't go into the details of this one, but its about looking at how a company should be priced relatively to a benchmark of other companies. Also there are a lot's of factor that could affect the price of a company and make it strays away from its fundamental value: crisis, interest rates, regulation, price of oil, bad management, ..... And even by applying the previous methods, the fundemantal value itself will remain speculative and you can never be sure of it. And saying that you are buying at a discount will remain an opinion. After that, to price companies, you are likely to understand financial analysis, corporate finance and a bit of macroeconomy."
If a company is valued correctly, then paying dividends should lower the share price, and buying back shares should leave the share price unchanged.  If the share price is $100, and the company pays a $10 dividend, then either its cash goes down by $10 per share, it is has to borrow money for the same amount, or some mixture. Either way, the value of the company has gone down by $10 per share.  If the share price is $100, and the company buys back 10 percent of its shares, then it also has to find the money, just as for the dividend, and the value of the company goes down by 10 percent. However, the number of shares also goes down by 10 percent, so the amount of value per share is the same, and the share price should stay unchanged.  Now there are psychological effects. Many people like getting paid dividends, so they will want to own shares of a company paying dividends, so the share price goes up. Similar with a share buyback; the fact that someone buys huge amounts of shares drives the price up. Both effects are purely psychological.  A buyback has another effect if the shares are not valued correctly. If the company is worth $100 per share but for some reason the shareprice is down to $50, then after the buyback the value per share has even gone up. Basically the company buys from stupid investors, which increases the value for clever investors holding on to their shares. If the shareprice were $200, then buying back shares would be a stupid move for the company.
As an officer of the corporation you'll have to pay salary to yourself. S-Corp has the benefit of pass-through taxation, C-Corp doesn't and has double taxation. Benefits - liability protection, can sell shares to investors, legally distinct entity. Disadvantages - have to deal with payroll, additional accounting, significant bureaucracy and additional layer of taxes for C-Corp (double taxation). Selling corporate assets is always a taxable event (although in your case it is probably not of an importance). You have to talk to a lawyer in your state about the options re the liability protection and how to form the entities. The formation process is usually simple and straight forward, but the LLC/Partnership operating agreements and Corporation charters/bylaws must be drafted by a lawyer if you're not going to be the sole owner (even if you are - better get a lawyer draft something for you, its just easier to fix and change things when you're the sole owner). You have to talk to a CPA/EA in your state about the taxes and how the choice of entity affects them.
"You are missing the fact that the company can buy back its own shares. For simplicity, imagine the case that you own ALL of the shares of XYZ corporation.  XYZ is very profitable, and it makes $1M per year.  There are two ways to return $1M to you, the shareholder: 1)  The company could buy back some fraction of your shares for $1M, or  2)  The company could pay you a $1M dividend. After (1) you'd own ALL of the shares and have $1M. After (2) you'd own ALL of the shares and have $1M. After (1) the total number of shares would be fewer, but saying you owned less of XYZ would be like complaining that you are shorter when your height is measured in inches than in centimeters. So indeed, a buyback is an alternative to a dividend. Furthermore, buybacks have a number of tax advantages over dividends to taxable shareholders (see my answer in Can I get a dividend ""free lunch"" by buying a stock just before the ex-dividend date and selling it immediately after?).  That said, it is important to recognize the shareholders who are less savvy about knowing when to accept the buyback (by correctly valuing the company) can get burned at the profit of the savvy shareholders.  A strategy to avoid being burned if you aren't price savvy is simply to sell a fraction in order to get your pro rata share of the buyback, in many respects simulating a dividend but still reaping some (but not all) of the tax advantages of a buyback."
No, you shouldn't buy it. The advice here is to keep any existing holdings but not make new purchases of the stock.
Of course, this calculation does not take into consideration the fact that once the rights are issues, the price of the shares will drop. Usually this drop corresponds to the discount. Therefore, if a rights issue is done correctly share price before issuance-discount=share price after issuance. In this result, noone's wealth changes because shareholders can then sell their stock and get back anything they had to put in.
buy an option, they cost less and let you buy shares in the future at the price you see now. only if you plan to buy more than 100 shares of the stock at that future date though. better learn how to use options strategically first, which I won't go into. but this is indeed their purpose.
Here's a different take:  Look through the lists of companies  that offer shareholder perks. Here's one from Hargreaves Lansdown.  See if you can find one that you already spend money with with a low required shareholding where the perks would actually be usable.  Note that in your case, being curious about the whole thing and based in London, you don't have to rule out the AGM-based perks, unlike me. My reason for this is simple: with 3 out of 4 of the companies we bought shares in directly (all for the perks), we've made several times the dividend in savings on money we would have spent anyway (either with the company in which we bought shares or a direct competitor).  This means that you can actually make back the purchase price plus dealing fee quite quickly (probably in 2/4 in our case), and you still have the shares. We've found that pub/restaurant/hotel brands work well if you use them or their equivalents anyway. Caveats: It's more enjoyable than holding a handful of shares in a company you don't care about, and if you want to read the annual reports you can relate this to your own experience, which might interest you given your obvious curiosity.
Yes, all the shares of a publicly traded company can be purchased. This effectively takes the company private so that it's no longer traded on a stock market. Here are some examples: EDIT: to answer your edited question... the corporation can issue more stock.  However that would dilute the value of existing shares.  Thus, existing shareholders must vote to allow more shares to be issued. So... in your situation yes, you'd need to wait for someone else to sell.
I am not required to hold any company stock. I also have an ESOP plan carrying a similar number of shares in company stock.  So if it were to be sold, what would the recommendation be to replace it? I can move the shares into any option shown, and have quite a few others.  Not dealing with any huge amounts, just a 4.5% contribution over three years (so far).