You Make the Call: When to sell Restricted Stock Units?

[LesClaypool]

I started a new job last June. At the time I was given $4,000 in restricted stock units - RSUs. Granted, nothing spectacular, but still, better than a poke in the eye, right? (If you're not familiar with RSUs, they're better than stock options, b/c they have intrinsic value - ie. whatever the price of the stock is, even if it's "down" - vs. relying upon a favorable price for them to have any value, in the case of options)

The RSUs vest 20% per year. So right now, I've got 20% of them vested.

Since my start date, the price of the stock has more than doubled.

Big picture, I think this is a great company, and I'd like to be a long-term investor. The thing is, I've taken promotions with other companies 3 times in the last 5 years, and while I like this company a lot and believe in it long-term, I don't know what the future will hold for me job-wise. Because I only vest 20% per year, I might end up never getting to exercise any of the other RSUs.

Plus, when a stock more than doubles in a year's time, there's often reversion to the mean...so I'm thinking even if I end up staying here 5-10 years or more, it would still not be a bad idea to take $1700-$1800 off the table, in this case, as it could drop a lot in the short-term since it's run up so fast in the last year.

My inclination is to sell the 20% now. What would you guys do?

 

[321Nole]

I assume you're talking in $K, right?

Sincerely,
The Locker Room

 

[LesClaypool]

I assume you're talking in $K, right?

Sincerely,
The Locker Room

Sadly no. I've already all but apologized for the paltriness of the amount though.

 

[RunRonnieRun]

I mean...it's $2,000. Flip a coin.

 

[OrlandNole]

What happens to the vested RDUs if you leave the company? Can you sell them at that time?

I was a partner/owner in a firm that I left last year and will get paid for my stock over a 15 year period - basically vacation money (or in my case college expenses for the next 5-6 years).

 

[LesClaypool]

What happens to the vested RDUs if you leave the company? Can you sell them at that time?

I was a partner/owner in a firm that I left last year and will get paid for my stock over a 15 year period - basically vacation money (or in my case college expenses for the next 5-6 years).

Anything that vests is mine so yeah that's an option too.

 

[OrlandNole]

Anything that vests is mine so yeah that's an option too.

Unless you really need the cash, I would hold onto it. The returns range from above average to spectacular and it's a way to diversify your portfolio. Additionally, it could send a wrong message if you divest of your ownership in the company so soon.