Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Allianz SE and ESPP - Do it?
Old 07-19-2007, 09:22 AM   #1
Full time employment: Posting here.
 
Join Date: Jun 2007
Posts: 567
Allianz SE and ESPP - Do it?

Every year I have a chance to buy ADRs (American Depository Receipts) in our parent company, Allianz SE (ticker: AZ). There's a one year blackout period before you can sell and we get it at a 25% discount (if it's trading at $24, we buy at $18)

The amount I'm eligible to purchase is under $10,000 so it's a lot of money (work with me here, I'm trying to change my mindset from 'anything under $100mm isn't a lot of money' to 'anything over $50 is a lot of money') but not an amount that would make me lose sleep if it lost value (if it lost all of its value, I'd be worried for other reasons).

It seems like a no-brainer to participate to me. I mean, a 25% discount on a stock with a P/E of 8.6 combined with what I know about our risk exposure makes it feel like I'll at least be able to cash in on that discount in a year if I don't want to hold it forever. However, our advisor always told me not to do it because "the stock hasn't been doing anything". Of course, he's not my advisor any more and this advice seems suspect.

Do it or not?
Webzter is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 07-19-2007, 10:21 AM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 17,203
Quote:
Originally Posted by Webzter View Post
Every year I have a chance to buy ADRs (American Depository Receipts) in our parent company, Allianz SE (ticker: AZ). There's a one year blackout period before you can sell and we get it at a 25% discount (if it's trading at $24, we buy at $18)

The amount I'm eligible to purchase is under $10,000 so it's a lot of money (work with me here, I'm trying to change my mindset from 'anything under $100mm isn't a lot of money' to 'anything over $50 is a lot of money') but not an amount that would make me lose sleep if it lost value (if it lost all of its value, I'd be worried for other reasons).

It seems like a no-brainer to participate to me. I mean, a 25% discount on a stock with a P/E of 8.6 combined with what I know about our risk exposure makes it feel like I'll at least be able to cash in on that discount in a year if I don't want to hold it forever. However, our advisor always told me not to do it because "the stock hasn't been doing anything". Of course, he's not my advisor any more and this advice seems suspect.

Do it or not?
I think your math is off.... a 25% discount from $24 is $18.... not $1...


If you really get a discount of 25%... then of course DO IT...

After a year, take the shares out of the account, transfer them to a broker and SELL.... keep doing this with as much money as you are able... even if the stock goes down, it more than likely will not be more than 25%...

BTW... I say to take the shares... our plan will prevent you from buying more if you sell inside the plan... but you can take out shares anytime you want....
Texas Proud is offline   Reply With Quote
Old 07-19-2007, 10:38 AM   #3
Full time employment: Posting here.
 
Join Date: Jun 2007
Posts: 567
Quote:
Originally Posted by Texas Proud View Post
I think your math is off.... a 25% discount from $24 is $18.... not $1...
Weird, I put in $18

Apparently 8 ) minus the space is a smiley 8)

And no need to transfer it to a broker, we buy through JP Morgan

thanks for the advice. I think it makes sense to do it.
Webzter is offline   Reply With Quote
Old 07-19-2007, 10:39 AM   #4
Recycles dryer sheets
 
Join Date: Aug 2003
Posts: 481
Yes you should do it and cash out as soon as the plan allows.
bongo2 is offline   Reply With Quote
Old 07-19-2007, 10:54 AM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Mar 2003
Posts: 18,085
I would do it.
__________________
"All animals are equal, but some animals are more equal than others."

- George Orwell

Ezekiel 23:20
brewer12345 is offline   Reply With Quote
Old 07-19-2007, 05:08 PM   #6
Thinks s/he gets paid by the post
maddythebeagle's Avatar
 
Join Date: Jun 2005
Posts: 2,450
I researched some of this for my sister's bank plan.....you have to pay ordinary income tax on the 25% discount...and will be reported on your W2...
__________________
- Hurry! to the cliffs of insanity!
maddythebeagle is offline   Reply With Quote
Old 07-19-2007, 05:36 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Nov 2005
Location: North of Montana
Posts: 2,769
Quote:
Originally Posted by maddythebeagle View Post
I researched some of this for my sister's bank plan.....you have to pay ordinary income tax on the 25% discount...and will be reported on your W2...
If you work there, you should have a good idea if the company will do well, hum-ho or disaster in the next 12 month. Watch the tax implications, I've heard of Canadian (therefore Canada's tax laws) 'hi-tech mega-corp' employees who bought company stock at a discount during the 2000 bubble and held through the tech collapse. They were left with 6 figure tax bills and relatively worthless stock.
__________________
There are two kinds of people in the world: those who can extrapolate conclusions from insufficient data and ..
kumquat is offline   Reply With Quote
Old 07-27-2007, 03:07 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 17,203
Quote:
Originally Posted by Webzter View Post
Weird, I put in $18

Apparently 8 ) minus the space is a smiley 8)

And no need to transfer it to a broker, we buy through JP Morgan

thanks for the advice. I think it makes sense to do it.
Let's see.... 8) yep...


Here is what our plan says..... and we have JPM also... it is what your plan says you can do... but ours is only 5% and they only buy 4 times a year so it is not that much of a deal...

If You Sell Shares Through the Plan If you decide to sell shares through the plan, your participation in the plan ends. In this case, your contributions stop as soon as administratively possible and you choose how your account should be paid to you, as described under "If You Voluntarily Close Your Account."



Remember




You can sell shares on your own by first withdrawing the shares from your account, or by transferring the shares to a book-entry common stock account. Withdrawing shares does not affect your participation in the plan. Please see "Withdrawing and Transferring Shares" for more information.
Texas Proud is offline   Reply With Quote
Old 07-27-2007, 03:30 PM   #9
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 4,005
If you're worried about the risk of allianz going down, buy a couple of put options dated out a year or so to hedge yourself against loss in allianz stock. If possible - don't know what's available for ADR's here.
justin is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


» Quick Links

 
All times are GMT -6. The time now is 03:12 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.