Actually by that time it was all employee purchase program (EPP) stock. You could put up to 10% of your post-tax income into a plan that every 6 months would buy stock at either 85% of the market price, or the 'lock in' price, which ever was lower, and the lock in price was set the first time you started the program, held for 2 years and then reset each 2 years after that.
> What would your advice be to people who hold most
> of their "investment" in a single companies stock?
Diversify. Especially if you are continually getting more of that stock (like RSUs or other options vesting). That is hard if you're not public and there isn't a secondary market.
A lot of people I knew in the dot com boom sold their stock and bought houses. That converted a fluctuating value asset into something they could live in regardless of its "value". They looked like geniuses in 2001. When we sold the company I had helped start I took a chunk of the proceeds and put it into a separate account to help my kids college education. (it wasn't a 529 but simply a named account that my financial planner helped set up).
Doesn't have to be fancy, putting proceeds into and S&P500 ETF is simple, low cost, and the S&P 500 has out performed a lot of single company stocks. (and underperformed some to be honest but you are trading future value against risk).
While working at Boeing, their EPP allowed you to purchase Boeing Stock, or invest in a managed fund. This was post 9/11 so their stock was hurting, so I invested 90% into their stock.
These days in the startup world, folks are given Restricted Options, which don't offer a lot of flexibility.
Even with a public event, employees have a 180 day lockup period before they can sell any vested options.
> Even with a public event, employees have a 180 day
> lockup period before they can sell any vested options.
It varies, when I was acquired in 1999 we could choose to dispose up to half our proceeds, it was negotiated as part of the deal. I also had an insane 18 month lockout which took me from pre-crash to post-crash and a 144x difference in stock price ($120/share vs $0.83/share)
I've always wondered about that. Isn't there some way you can hedge against that possibility, say, by buying puts? Or is that forbidden by contract?
I had a friend who worked at one of the early e-retailers. During the lockout period she was a multimillionaire (on paper), and by the time it ended her options were under water. It made me wonder if you could give up part of your potential payday for a little certainty.
When you got the stock, was it issued as option grant, or actual stock grant?
What would your advice be to people who hold most of their "investment" in a single companies stock?