First, congratulations on your success.Posting here because this is more about the decision making process than about analysis of my company's prospects in particular.
So I am generally an index funds only person, being shaped by the Motely Fool FIRE board since the mid 90s and then here. But I have a bunch of company stock that was granted when we were acquired by our current parent company. Said parent company is AppLovin, an ad tech company that is up so much since our earnings came out last week that if I sell it and pay 50% of it in taxes, it now represents 37.5% of our household net worth (not including the house which I always feel weird about including, the house moves it to 29.6%).
I'm struggling with what to do. It could drop back to the $13 a share or so low from a couple years ago (it is at $290 now). Or it could muddle along at roughly the current value, or it could conceivably double again if our revenue grows as crazily again or people just decide they want to pile in now that we entered the NASDAQ 100. I'm trying to do Bayesian reasoning on it but I can't even come up with reasonable guesses for percentage likelihood of those scenarios.
Including house value in our net worth, selling the company stock now would put us close to what I consider escape velocity where as long as my wife keeps working till she hits retirement age, we'd definitely be able to retire with a lifestyle similar to what we live currently. I still have my job (and weirdly if they lay us off the stock might jump since my part of the business is a drain on the performance even if we are wildly successful), and like making video games, so I expect to keep working myself too, though ageism may impact that whenever I do have to hunt for a next job.
So taking the profits now locks in that somewhere in the 10-20 year range we are all set. Hanging on might mean in a quarter or two we are all set, or it might mean we are pushed back 5-10 years from being all set... :/ Risk, reward. I don't have to sell everything, so I could sell all the stuff that qualifies for LTCG, but that's only about a third of it (2/3 of it is unexercised options, 1/6 is exercised options I've held for a couple years and 1/6 is ESPP purchases that mostly are qualifying after the 22nd of this month).
I really hate owning individual stocks, though this is the first time it has been a problem in a very good way.Any advice or perspective for helping me make a decision would be great.
Like others have said; I can’t tell you what to do, only what I’d do in your situation.
I’d protect my backend and (your family.) sell what would bring me to my medium FIRE goal. Do what you think is best for the rest.
My consideration would be leaving a quarter of it in (post FIRE sale) put another quarter in something super stable gold treasuries etc… and then dump the rest into index funds.
Find a good tax professional to see how you can mitigate that, but then again that’s a good problem to have.
I’ve been playing games for thirtyish years did you make anything I would have played?
