Author Topic: Company Acquisition - Open trading window...why wouldnt I sell now?  (Read 882 times)

KiloRomeo

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So the public company I work for has just announced that it is being acquired and the stock price has jumped up to the acquisition price. I'm currently in an open trading window, is there any reason why I shouldn't sell right now? I'm basically guaranteed the acquisition price but this shifts some of my tax burden to 2019 (still trying to think if that's a good thing) and then I would be guaranteed the acquisition price in the rare case this fell through.

What am I missing?

dsw

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Re: Company Acquisition - Open trading window...why wouldnt I sell now?
« Reply #1 on: December 23, 2019, 10:25:37 AM »
It sounds like you have the right idea in mind. While there is a chance that the stock price could drop if the acquisition falls through, or rise if a competing offer comes in, both are likely remote possibilities. If it were me, I'd just go with whatever worked the best in regard to taxes and not worry about the rest. I can think of two questions that are worth figuring out . . .

The first (and the one you already mentioned) is whether or not you want to sell in this tax year or next.

The second is around long term versus short term capital gains. If you've held any of the stock less than 12 months, you might see if holding until the acquisition gets you over the line.

Otherwise congratulations on the jump in price! Now you just have to be on the lookout for post-acquisition job cuts . . .


mm1970

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Re: Company Acquisition - Open trading window...why wouldnt I sell now?
« Reply #2 on: December 23, 2019, 10:46:23 AM »
I'd sell.

2sk22

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Re: Company Acquisition - Open trading window...why wouldnt I sell now?
« Reply #3 on: December 23, 2019, 10:46:44 AM »
Sell as much as you can and diversity. I assume you are talking about RSUs or options. Many acquisitions go badly so there's no guarantee for the future!

KiloRomeo

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Re: Company Acquisition - Open trading window...why wouldnt I sell now?
« Reply #4 on: December 23, 2019, 12:33:04 PM »
So I'm running the number and I think even without this immediate vesting, I'm going to be in the 24% bracket for both 2019 and 2020. The only reason I can think of now to accelerate to 2019 is for my Roth IRA. Looks like the 2019 limit is 203k. I can basically sell in 2019 to get me closer to that number and then hopefully when everything else vests in 2020 I can somehow stay under that number again. It's going to be close.

That and in case things dont work out with the acquisition.