Home › Forums › Other › Poll: ESPP participants. Do you typically take the money and run or hold for cap gaps treatment.
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Coronita.
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December 21, 2007 at 2:58 PM #122477December 21, 2007 at 2:58 PM #122236
cooperthedog
ParticipantOne last thought –
A 15% discount is actually a ~17.5% gain on the money you invest into the ESPP.
December 21, 2007 at 2:58 PM #122383ParticipantOne last thought –
A 15% discount is actually a ~17.5% gain on the money you invest into the ESPP.
December 21, 2007 at 2:58 PM #122406ParticipantOne last thought –
A 15% discount is actually a ~17.5% gain on the money you invest into the ESPP.
December 21, 2007 at 2:58 PM #122460ParticipantOne last thought –
A 15% discount is actually a ~17.5% gain on the money you invest into the ESPP.
December 21, 2007 at 2:58 PM #122482ParticipantOne last thought –
A 15% discount is actually a ~17.5% gain on the money you invest into the ESPP.
December 21, 2007 at 4:13 PM #122325CBad
ParticipantI guess it would really depend on the company you worked for and how the stock was doing. So far I’ve kept it and have been pleased. That could change though.
December 21, 2007 at 4:13 PM #122473ParticipantI guess it would really depend on the company you worked for and how the stock was doing. So far I’ve kept it and have been pleased. That could change though.
December 21, 2007 at 4:13 PM #122495ParticipantI guess it would really depend on the company you worked for and how the stock was doing. So far I’ve kept it and have been pleased. That could change though.
December 21, 2007 at 4:13 PM #122552ParticipantI guess it would really depend on the company you worked for and how the stock was doing. So far I’ve kept it and have been pleased. That could change though.
December 21, 2007 at 4:13 PM #122573ParticipantI guess it would really depend on the company you worked for and how the stock was doing. So far I’ve kept it and have been pleased. That could change though.
December 21, 2007 at 4:14 PM #122335stansd
ParticipantCoop,
I didn’t pencil it out on a spreadsheet…was more for illustrative purposes. That said, I was assuming 25% tax rate vs. 15% cap gains.
Under that scenario, it costs you $6.50 to hold (you pocket $95 if you flip, but $88.50 if you hold and the stock declines 10%). However, you have to add to that $6.50 the opportunity cost of the $95 you would have had in the bank (I’m assuming for 1 year). If this earns 5%, you are up to $10.06 in savings by flipping because of the earned interest of $4.75 less additional taxes of $1.19.
The point holds that you take on a good amount of risk by holding. With Opportunity Cost factored into your scenario, I get a breakeven of $99.44.
Stan
December 21, 2007 at 4:14 PM #122483ParticipantCoop,
I didn’t pencil it out on a spreadsheet…was more for illustrative purposes. That said, I was assuming 25% tax rate vs. 15% cap gains.
Under that scenario, it costs you $6.50 to hold (you pocket $95 if you flip, but $88.50 if you hold and the stock declines 10%). However, you have to add to that $6.50 the opportunity cost of the $95 you would have had in the bank (I’m assuming for 1 year). If this earns 5%, you are up to $10.06 in savings by flipping because of the earned interest of $4.75 less additional taxes of $1.19.
The point holds that you take on a good amount of risk by holding. With Opportunity Cost factored into your scenario, I get a breakeven of $99.44.
Stan
December 21, 2007 at 4:14 PM #122504ParticipantCoop,
I didn’t pencil it out on a spreadsheet…was more for illustrative purposes. That said, I was assuming 25% tax rate vs. 15% cap gains.
Under that scenario, it costs you $6.50 to hold (you pocket $95 if you flip, but $88.50 if you hold and the stock declines 10%). However, you have to add to that $6.50 the opportunity cost of the $95 you would have had in the bank (I’m assuming for 1 year). If this earns 5%, you are up to $10.06 in savings by flipping because of the earned interest of $4.75 less additional taxes of $1.19.
The point holds that you take on a good amount of risk by holding. With Opportunity Cost factored into your scenario, I get a breakeven of $99.44.
Stan
December 21, 2007 at 4:14 PM #122560ParticipantCoop,
I didn’t pencil it out on a spreadsheet…was more for illustrative purposes. That said, I was assuming 25% tax rate vs. 15% cap gains.
Under that scenario, it costs you $6.50 to hold (you pocket $95 if you flip, but $88.50 if you hold and the stock declines 10%). However, you have to add to that $6.50 the opportunity cost of the $95 you would have had in the bank (I’m assuming for 1 year). If this earns 5%, you are up to $10.06 in savings by flipping because of the earned interest of $4.75 less additional taxes of $1.19.
The point holds that you take on a good amount of risk by holding. With Opportunity Cost factored into your scenario, I get a breakeven of $99.44.
Stan
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