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> Another variable is whether your personal effort materially affects the outcome for the company. Well no, the question supposes you work for the company in e
by abalone 9y ago
> Another variable is whether your personal effort materially affects the outcome for the company.
Well no, the question supposes you work for the company in either case. If you held $1M in cash, would you invest it all in the company you work for because maybe you can affect the outcome? If not then probably you shouldn't hold onto $1M in equity... if you're perfectly rational that is.
- jjeaff 9y agoThere is one reason that it might behoove you to keep everything invested in the company you work for. It may be that you have insider information that no one else knows.
- abalone 9y agoThat's fine. The question is not "are there good reasons to invest in your employer." It's "are you rational enough to treat $1M equity and $1M cash the same." Also, it is uncontroversially a bad idea to invest "everything" you have in one company.
- YZF 9y agoTechnically if you buy the stock based on insider information you're breaking the law. If you get stock and don't sell it I don't see how that can be considered insider trading...
- jjeaff 9y agoYes, which is why I said "keep" the stock. If you're buying and selling based on insider info, you could be in trouble (thought unlikely as an employee that isn't an executive). But no one could be prosecuted for just not selling stock they receive as compensation.
- deleted 9y ago[deleted]