I just gave notice at my job, and I've decided I'm likely going to exercise my stock options (ISO) instead of letting them expire. I figured I'd put it here in case there are contrary opinions. Details:
1. We have a pre-existing well diversified portfolio. Once exercised, these options will represent ~1.5% of our portfolio.
2. The exercise price would be about $20K. As of the last valuation, the shares would have a market value of about $25K. This is private-company stock, so there is no secondary market for it.
3. This is a private company that is perpetually "almost" ready to go public. I'm confident they will actually go public at some point, but I'm not convinced it's "right around the corner" as they've been claiming for the past few years.
4. Despite their best efforts, the company is actually doing pretty well in 2018. I expect the current value is actually higher than the valuation implies. However, it also wouldn't surprise me if the company shoots itself in the foot with some type of scandal or boneheaded move.
5. I would have to sell existing holdings to fund this purchase. I routinely invest all excess cash pretty quickly. I can sell specific holdings to avoid a tax hit, although this would throw off my allocations until I have more cash to invest. This will stress me out more than it reasonably should (MPP, I know).