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> a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest. Can confirm. A couple of decades ago I was working at

> a shocking number of people getting a large part of their comp in RSUs don't diversify when they vest. Can confirm. A couple of decades ago I was working at EMC. Back then we got options instead of RSUs, but I basically always cashed out as soon as could and moved the money into other things. I figured I already worked there and had the stock purchase plan and the unvested options, so I didn't need more eggs in that basket. All of my coworkers thought I was crazy ... until I watched many of them ride the stock from $114 down to $3 hoping all along that it would come back up. I was lucky to have learned the lesson the easy way, but I'm pretty sure they all learned it too. Also pretty sure that many of my former FB colleagues are right now doing exactly the same. Twenty years from now, if HN hasn't collapsed into a black hole of toxicity by then, we'll probably be having the exact same discussion about whatever replaces FB. The wheel keeps turning.

tedsanders 4y ago
Options are a totally different story than RSUs. If you exercise immediately, you’re throwing away a huge part of their value. From an efficient markets point of view, RSUs should be immediately sold but options should be held until the option premium equals the risk concentration premium. Also, the fact that a single stock once fell from $114 to $3 should have no bearing on decision making.
- notacoward 4y ago
  > the fact that a single stock once fell from $114 to $3 should have no bearing on decision making Recognizing the possibility that such a thing can occur shouldn't affect decision making? Sounds blinkered and crazy to me. It's exactly how my coworkers lost their shirts. Finance-bro jargon aside, you don't seem to understand basics like the kinds of options given by employers at that time (two types neither the same as the ones you buy on the open market) or even the value of diversification. But sure, go ahead and keep proving my theory about why we won't be having that discussion here in twenty more years.
  - ghaff 4y ago
    And of course that sort of devaluation was not at all rare at the time. EMC was hardly an outlier. I did get rid of some of that EMC stock but held way too much of it even if it recovered some value over time.

tedsanders 4y ago

Options are a totally different story than RSUs. If you exercise immediately, you’re throwing away a huge part of their value. From an efficient markets point of view, RSUs should be immediately sold but options should be held until the option premium equals the risk concentration premium. Also, the fact that a single stock once fell from $114 to $3 should have no bearing on decision making.

notacoward 4y ago
> the fact that a single stock once fell from $114 to $3 should have no bearing on decision making Recognizing the possibility that such a thing can occur shouldn't affect decision making? Sounds blinkered and crazy to me. It's exactly how my coworkers lost their shirts. Finance-bro jargon aside, you don't seem to understand basics like the kinds of options given by employers at that time (two types neither the same as the ones you buy on the open market) or even the value of diversification. But sure, go ahead and keep proving my theory about why we won't be having that discussion here in twenty more years.
- ghaff 4y ago
  And of course that sort of devaluation was not at all rare at the time. EMC was hardly an outlier. I did get rid of some of that EMC stock but held way too much of it even if it recovered some value over time.