Paid Members SpursRiot2012 Posted July 21, 2014 Paid Members Share Posted July 21, 2014 Hey,  So, my company got bought by Ericcson and, since I'm a full-time, permanent employee, I can join the company Stock Purchase Scheme.  I feel like maybe this could be something to do, but I don't really understand it. Is it basically, they use x amount of my salary to buy stock and then I hope the price goes up and I could sell or what? No idea.  Here's a bit of the email:    Key Plan ElementsEmployee signs up for payroll deductions Company matches employee’s shares 1-for-1 after three (3) year qualifying holding period Matching shares are taxable according to applicable country tax legislation Stock Purchase Plan You can contribute up to a maximum of 7.5% of your gross base salary per month and per year Deductions are taken each pay period from net salary Plan administrator (Computershare) purchases stock every three (3) months with accumulated employee contributions Stock will be purchased at fair market value  Anyone know anything about these things? Link to comment Share on other sites More sharing options...
Paid Members Your Fight Site Posted July 21, 2014 Paid Members Share Posted July 21, 2014 The “stock will be purchased every three months with accumulated employee contributions” line sounds a bit fishy. If you say “yes” now, and stock’s at say, £10/share, then in three months’ time it goes up to £15/share, you’re going to get less shares when the plan administrator (Computershare) actually goes to purchase the stock than when you agreed to it.  On the flip-side, if share prices go down, you obviously get more for your buck. Link to comment Share on other sites More sharing options...
Paid Members JNLister Posted July 21, 2014 Paid Members Share Posted July 21, 2014 I am not a financial advisor but... Â The key here seems to be that however many shares you've racked up after three years, the company gives you a matching number of shares, at which point you can sell the lot. Â It's basically a buy one, get one free deal, so the price would have to drop dramatically (like much more than 50% given you are buying them in chunks) for you to come out behind on the deal. If the price simply stays the same, you've doubled your money. Link to comment Share on other sites More sharing options...
Paid Members SpursRiot2012 Posted July 21, 2014 Author Paid Members Share Posted July 21, 2014 Wow. There doesn't seem to be any reason I wouldn't do that. I got to doubt that Ericcson's share price will drop 50% in three years. Â Cheers, guys. Link to comment Share on other sites More sharing options...
Paid Members John Matrix Posted July 21, 2014 Paid Members Share Posted July 21, 2014 Just to offer a different perspective on this, i worked in the stock market for 4 years, on the dealing desk no less and my honest advice, based on what i've seen, is stick the money on a horse, or a football game instead.  Stocks and shares is effectively a bet, and i've seen it go very, very wrong. You might not be talking about a sum of money you're arsed about, in which case it's absolutely worth a punt, but i saw a guys £80k porfolio turned into £11 overnight due to a corporate event, which admittedly is as unlikely as you making a killing, but it's still worth bearing in mind.  Bad press, terrorist attack, consolidation of shares, there's a million and one things out of your control which can have a negative effect on share prices. That said, the price has been very steady by the looks of it, i just wanted to flag up the less glamourous side because it's something you should think about. Link to comment Share on other sites More sharing options...
Ant Posted July 21, 2014 Share Posted July 21, 2014 It seems a good tool for staff retention. Ie you feel you've bought into the firm for that perod and won't wanna budge. Sure Walmart/Asda were infamous for starting this kinda of thing in the UK. Â One word of warning, I heard last week about some of the clauses attached to this or similar types of "offer" result in you giving up some basic employee rights, so make sure you read all the boring small print. Link to comment Share on other sites More sharing options...
King Coconut Posted July 21, 2014 Share Posted July 21, 2014 Just to offer a different perspective on this... Bad press, terrorist attack, consolidation of shares, there's a million and one things out of your control which can have a negative effect on share prices.  While any of that can happen, mostly it doesn't, and if the company is doubling up your investment, it's pretty much always a good idea if you're planning on staying in the job for the foreseeable. Link to comment Share on other sites More sharing options...
Loki Posted July 21, 2014 Share Posted July 21, 2014 At what price do you buy the shares? Â Some schemes choose the highest price between the start and end dates less 20 percent or similar. Â In these schemes, as long as you sell the shares on the day you get them (i.e at the end of the year) you are guaranteed to make money. Â Anything else I'd be wary of. Â I can totally see Ericcson halving their share price in 3 years. Â I bought a ton of shares in EA through my share incentive scheme at 40 dollar a share (20% below the market value at the time) then broke my above rule and went on holiday for 2 weeks. Â During that time the stock market crashed and the stock bottomed out at about 11 dollars a share and has never since gone above 30. Â If you do do it, only put in money that you can afford to live without for an extended period of time / forever. Link to comment Share on other sites More sharing options...
Paid Members JNLister Posted July 21, 2014 Paid Members Share Posted July 21, 2014 Yeah, absolutely echo that last sentence. The odds are in your favour here, but you need to be comfortable with the possibility of losing it all, plus of course it needs to be affordable to have a reduced income now. Link to comment Share on other sites More sharing options...
Moderators neil Posted July 21, 2014 Moderators Share Posted July 21, 2014 This doesn't look like that great of a stock plan to me. I'd only go with it if you actually wanted to invest in the company. Many plans will give you a discount to the market price. In which case you're pretty much always making money, however with this the only gain you get over say myself buying stock is the company will match you...but only after 3 years. Â I am going to presume that in the 3 years to get that match you need to buy and hold the stock and continue being an employee there. That's a lot to ask in my opinion. Link to comment Share on other sites More sharing options...
Paid Members SpursRiot2012 Posted July 21, 2014 Author Paid Members Share Posted July 21, 2014 Hmm, good points for all of you, there. Â Thanks for the advice. Apparently, we're supposed to get a whole guide and stuff on the 28/7, so I'll check it out more at that point. Link to comment Share on other sites More sharing options...
Paid Members FelatioLips Posted July 21, 2014 Paid Members Share Posted July 21, 2014 Not to sound like I'm having a pop or anything, but do you think you'll still be working there in 3 years or long enough to see any benefit? Link to comment Share on other sites More sharing options...
Paid Members SpursRiot2012 Posted July 21, 2014 Author Paid Members Share Posted July 21, 2014 Well, I don't see where else I'll be if I'm still in the country. I do have an idea about moving to Spain, but I don't know if that's going to come to fruition. Link to comment Share on other sites More sharing options...
Paid Members FelatioLips Posted July 21, 2014 Paid Members Share Posted July 21, 2014 Oh right, it's just I could be wrong but for some reason I have the idea this is like your 3rd or so job in as many years but I could be thinking about someone else.If Spain is an idea, I guess you could use the money from this to go towards that at the end of it. Link to comment Share on other sites More sharing options...
Paid Members SpursRiot2012 Posted July 21, 2014 Author Paid Members Share Posted July 21, 2014 Nah, it's probably me. I've moved around a lot but this is the first permanent job I've had in...maybe ever. Link to comment Share on other sites More sharing options...
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