Is ESPP (Employee Stock Purchase Plan) worth it? It has 10% discount, but we need to hold the stock for a period (at least one year I guess). I don’t think it worth the risk. Especially, considering future layoff, maybe it’s wise to not hold any MS stock. Instead, I prefer to buy stock in other industries as a hedge.
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The discount is only a guaranteed return if you are both going to stay employed for that long (good luck with that in this climate), and you believe the stock won't fall more than that amount and you believe that money couldn't earn an equivalent return in a broad index
Remember you can't sell for a year meaning you wait for a year before you are allowed to sell.
Generally, be careful purchasing stock in a company that you also work for. If the company performs poorly (and/or goes out of business), you can lose both your job and the value of your company stock.
If you are buying the stock without a discount, your argument may have merit. However, the 10% discount offsets your concern.
For the original comment “buy stock in other industries as a hedge” i mean:
Let’s assume our job security correlates MS stock price (MS stock goes up -> less layoffs and MS stock goes down -> more layoffs ). Then, to hedge the risk of layoff, we probably should not buy MS stock. Instead, we should invest other areas which are opposite positions MS or entire financial industry.
It is not only wise but it its the right thing to do. I dont understand your hedge comment please explain...