Hmm... stock options?

Killick · Dec 28, 2006

Weird item today. Someone at my shop evidently thought I was doing something right, put me in for some corporate award. Bottom line is I get a nice little certificate and opportunity to buy 150 class A common shares of the company. Have no idea if it's worth it. If I go with the full 150 (can only go 50 at a time over a three-year period), I'm looking at about $7,500. Not much of a market follower, but it seems that the advantage is that my buy-in is always locked at the current price. Stock goes up? Doesn't matter. I still only pay today's price. Other than that, I don't see a huge upside. Advice, anyone? (Knowing what financial geniuses and moguls we have in attendance...)

Freelance Hack · Dec 28, 2006

Sounds reasonable. Can you do it through payroll deductions?

Killick · Dec 28, 2006

Looks like I can. Price of the stock is already up more than a point over my price. It's intriguing. Just don't know all the angles (tax liability, etc.) yet.

Freelance Hack · Dec 28, 2006

Killick said:
Looks like I can. Price of the stock is already up more than a point over my price. It's intriguing. Just don't know all the angles (tax liability, etc.) yet.

Does your parents (or anyone in your family/circle of friends) have a financial advisor? If so, it may be worth a call to them to find out some more.

When you say you're locked into the 12-26 price, is that just a ceiling? If the stock drops or if it splits, do you get to buy at the lower price?

BTExpress · Dec 28, 2006

Hope you have better luck than me.

I was granted 242 options about six years ago at $37.

Stock made it up to just over $50. Was all set to cash in the options when it hit 55.

Never made it. Trading at $31-$32 these days.

Options run out in another four years.

Killick · Dec 28, 2006

Freelance Hack said:
When you say you're locked into the 12-26 price, is that just a ceiling? If the stock drops or if it splits, do you get to buy at the lower price?

If I'm reading this right, yes. Actually, the date they fixed the price was in mid-November. Checking NYSE, it's already up more than seven bones (although, it's riding as high as it's been all year and checking SEC filings, the company leadership is selling a ton of stock -- that doesn't bode well).