I am an employee of a company going public in a year or so and I was given 2000 shares of stock, any thoughts?

Question

I was told that I was going to be recieving an additional 1,000 shares per year. I am new to the whole idea of a company going public, I know the basics of it but does anybody have any insight or thoughts?

Answer 1

When you're company goes public, they will have an IPO (initial public offering). The share price of the IPO will be predetermined before they go public. Your first 2000 shares will be priced according to the IPO price. Also, you will probably not be able to sell your shares for a certain period of time, possibly a few years.

Hopefully the shares go up.....

Good Luck

Answer 2

As the other user said it is a very generous offer.  Are there any stipulations on the sale of those shares?  Do you have the shares or are they options to buy the shares at x $?  

Do you plan on staying at the company for a long time?

Usually when a company has an IPO (Initial Public Offering) the shares jump quickly and then fall back then go up again (if the company has good product/service).  If you believe that the company is here to last it would be wise to just hold on to them. Watch and listen to what the stock is doing. Since you work for the company you will know how they are doing. If you think it is not going to do well you can sell the shares.

On the other hand if you think they are going to do well keep them. Some shares may split so instead of having 1000 $10 shares you will have 2000 $5 shares. Then the shares can grow back to the $10 range.  Now you would have 20,000 instead of a $10,000 investment.

Do not put all your eggs in this one basket (company).  If you have a 401k with them I would put most of that money in mutual funds that do not have anything to do with this company. Spread it around.

Sounds like a good company to work for.

Answer 3

The thought is it is a generous perk;

so work your butts off

and pray twice a day minimum that the company will be successful and that after the IPO the stocks will jump 3 folds, or jump as Google's did.

Then the insight is: DO NOT SELL THE STOCK AND BUY A LAMBORGHINI; drive a cheap car, live a comfy life, work your butts off and save for your cold days.