With the stock at an all time low, should I suspend my ESPP (or lower my purchases), or is this when you buy more? Buy low or stop wasting money on this dog stock? Not sure what to do. Thoughts?
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ESPP Shares just dropped. I've been checking it all day!
Nice rise today, too! Sold them ASAP.
I've been contributing to the ESPP for a few quarters, and often kicking myself for not doing it sooner.
But I never hold on to the shares. I sell them as soon as they are mine.
And what a wise idea that has been (so far). My shares purchased 1 year ago were purchased at $62.79 (with the discount). I sold them a few days later at $77. Today they'd have been worth $46.
And it's nothing personal against CVS. I'd just rather not own any company stock. I'm just here for the discount.
I view it like a forced savings.
If it’s low and flat, and you have high confidence in dividend and the dividend/yield is high… it may be better than meets the eye
- 67 dividend on a $40.40 (discounted share price) stock is a 6.6% yield… sure there are good S&P ETFs with better historical returns but you can see if that price goes even deeper you can see how it can actually get more attractive from a yield perspective
There is some ROI from participating in the ESPP and selling the shares as soon as they are available (10-14 days from period close). You'll take a hit on short term gains compared to holding the shares a year. It's my opinion ESPP programs are worth it when a company is performing above average and has some growth. For a company that's flat or worse, clearly struggling, there's little gain. Take the paycheck contribution and dollar cost average every pay period into your favorite ETF and you'll be better off.
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You absolutely can buy on the market assuming you are not an executive held to insider trading laws…
But again Enron taught us don’t hold too much of a stock in which is also your employer.
Can an employee buy stock off the market while also contributing to the ESPP? Are there any restrictions on buying from the market? The ESPP shares in my account are so beaten down that I need to do Dollor-Cost averaging(DCA)?
Whomever told you there is a vesting period is a liar or you’re an id--t.
Read the ESPP documents themselves in CZ and on ETrade.
Sure holding a year is better for one’s taxes assuming the stock goes up but given this companies track record what you “save” in taxes is lost (and then some) in share value.
Shares will hit my account on the 15th and I can sell right away.
Now if someone gets shares granted to them as apart of their compensation (I do not) THOSE may have a vesting schedule.
You are not required to hold for any vesting period. That’s absolutely false.
There is like a 10-14 delay from the close of the period to the shares hitting your E*trade account and then you can sell.
The waiting comes into play if you want to treat any earnings as long term capital gains… you are not required to do this. Selling and taking the tax at your normal income tax level will very likely still be a positive ROI unless as I said… the stock is lower on the closing day than opening day AND it drops 10+% from the day of close to the date you sell which again you can do 10-14 days after the period closes.
There is no vesting period like there is with RSUs… I’ve been doing this for years….
The person saying that they take the discount and sell right away is trolling: You can't sell right away. You're required to keep the stock for a vesting period before selling regardless of how small your purchase.
I buy 5% of the ESPP and am continuing to do so…
But I hold exactly 0 shares as soon as it hits. I take the discount and run with the money. With the look back selling instantly only has risk if the stock price drops more than 10% between end of period and when the stock hits my account.
Over all even if that happens this time I’ve still made a ton of money over the years by doing this.
“Don’t hold stock of a company you work for any longer than you need to” has been advice I’ve never regretted and learned from Enron.
If you sell right away, and take the tax on the short term gains, you will still very likely make money.
Only way to really lose is if the stock drops 10% between the end of the period and when the stock hits your E*trade account like 10-14 days later.
Not impossible, just rare. If you sell right away always… the whole is it a good long term holding thing doesn’t matter.
You get something at a 10% discount that you can sell a handful of days after at market rates.
The tax might take it to a 5% gain but it’s still positive ROI.
Thanks to those who offered their thoughts, which is what i asked for, not a snarky response about asking this question on a lay off board. It's all related to company performance.
You’re asking financial advice on a layoff message board? Ask a professional.
I have been buying for years, but have reducing my amount each time it comes open for purchasing. This time around I am only purchasing 2%. I did this only after talking to my financial advisor. If you have a financial rep, talk to them and have a long term plan. I an 10+ years from retirement or I wouldn’t buy any.
I also max out my 401k and have it being managed (highly recommend).
I suspended my contributions to the ESPP either earlier this year or last year. Even with the advantaged purchase price, the program is a good option for a stock that's growing over time. I'm not confident this stock will grow much and remember you'll want to hold the stock for a year to avoid short term capital gains taxes. No thanks.
Put the money in a diversified index fund.
I am going to suspend as soon as the lock on suspension is lifted. Putting my money in better investments.
There's an inside joke about Jim Kramer. If he recommends a stock it's the kiss of death. I think he was a buy on CVS a month or 2 ago. The more you know...
I would stop asap! Company has serious problems and lots of fear of the dividend being cut
I and others I've spoken with have stopped contributing to the ESPP. If you are holding long term, it may be okay, but I think there are better investments out there. I personally have lost tens of thousands on the stock and am sick of it.
Depends on your financial stability. Given the company's status, do you have money saved in the event of layoff? If not, you may be better served putting the money used to buy stock into savings which still has a decent interest rate. Make sure your 401k is maxed out too.
I sold half mine and I am keeping what I bought when the stock was higher.