my company gave me shares, now what?

If you’re asking yourself, “my company gave me shares, what do I do next?”

The first step to company stocks: when someone gives you a birthday gift, you unwrap it. You’re a stockholder now, girl! Congrats!

In this post, you’ll discover the 3 steps you need to take to set yourself up for investing success – including the answer to the question: how do you know when it’s the right time to sell your stocks?

And if this is your first time investing? Join Penny! We broke down the rules and the lingo, and made it easy for you to manage your shares like a pro. (Learn more about Penny here.)

👀 5min read

my company gave me shares

📸: Karolina Grabowska

Figure out the key dates and numbers

We know the “New Stockholder Hat” can feel daunting (and confusing), especially if it’s your first time investing.

The first step to success = Knowledge.

Get familiar with the stocks or shares your company gave you.

Ask yourself these questions:

What are my shares worth?

A quick internet search of “company name + shares” (or “share price”) will do the trick. Once you find out how much 1 stock is, multiply that by the number of shares your company gave you. That’s how much your total shares are worth in the market.

When do you "vest"?

Vesting means you will own 100% of the shares. Often, companies give away “true” ownership only after a period of time – like 3 months or 1 year. Find out when this happens, and add it to your calendar. This is when you might need to take action.

When are the "open windows"?

Open windows may give you the opportunity to buy or sell company shares freely. It’s important to know when these trading windows happen, and the specific rules your company may have around them, so you have the opportunity to buy or sell your shares – and make more money in the process.

What are the "holding periods"?

Holding periods refer to the period of time you’ve been a stockholder: how long have you held the shares for? Your company may impose restrictions on how early you can sell your stocks, especially if they haven’t been fully vested (aka. “transferred”) yet.

What price did you acquire the stock or stock options at?

As an employee, you probably got your shares at a discounted rate. This number is your magic clue to know if (or when) it’s the right time to sell your company shares. (Or to buy more, especially if you have the option to buy employee shares at a discount.)

Now that you have all of this information at your fingertips, and you added the important dates to your calendar – what’s next?

Set stock price alerts

Once you get familiar with your company shares, and know:

your share value (including how much you bought it for vs. market price)
dates for when your stock is fully vested (aka you have full ownership)
timeline for open windows and holding periods (so you know when to buy/sell)

The next step is to set stock price alerts, so you can follow your company's stock.

Consider it the investing version of a really big annual sale at your favorite retail store. Instead of doing the math on how much more you can purchase with a BOGO deal, this is the kind of chatter your mind will start to notice:

I got my shares at $25 and the stock is trading at $50. Yay, I doubled my money.
I got my shares at $10 and the stock is trading at $12. I made $2 per share.
I got my shares at $100 and the stock is trading at $50. I lost half of the value.

Why is it important to know what it’s trading at?

So you know if you should keep, buy, or sell your shares of course!

Remember: the price you bought your shares is your clue to knowing when might be the right time to sell (so you can cash in) or to buy more stocks (if you believe you’ll make more money).

That’s what we’ll look at next.

Take action when you've earned money

And by “take action” we do mean “sell your company shares”.

How do you figure out when to sell your stocks?

This is very, very hard – unless you're looking back in time or own a magic crystal ball. Most likely, your company stock isn't going to go up and up forever. So,

Rule of Thumb: Buy Low, Sell High.

If you've doubled or tripled your money, it’s probably a good time to pocket that cash. You don't want too much of your net worth locked up in a company stock -- take money off the table and get some cash (AKA liquidity) into your bank account instead.

What does pocketing your money actually mean? Assuming you sell your stocks at x2 or x3 the original rate, you could:

Reinvest your pocketed money into low-risk investing options, like bonds;
Keep half the cash and use the rest to buy shares from a different company; or
Move the money to a retirement or high-interest savings account.

Action #2 is also an option if you think the stock will continue to do well, but you’re not sure you want to keep that much cash in company shares.

Pocket half the cash, and keep the rest invested as is. Assuming you already made x2 or x3 more than the original price you paid for: If the value goes up, you win more money. If it goes down, you already got your original cash back, so at least you break even.

What about taxes?

This will depend on what type of shares your company gave you. If your company gave you shares like RSUs, they will be taxed differently than if you were offered “stock options” like ISOs or NSOs.

For the full breakdown on RSU vs. ISO vs. NSO (and the taxes you might have to pay) read this blog post.

The real answer to “my company gave me shares, now what?” is: Learn how to invest!

Investing is like a video game – played over the course of months or years. And your company shares are your beginner bonus pack. You just got a freebie deal that puts you ahead of the curve.

If you haven’t learned how to invest yet, a Penny membership is a great place to start!

As a Penny member, you have access to a full money module that walks you through exactly how to invest in easy, bite-sized pieces – including how to double-check if your money is already invested. (EXTRA important if your company also gave you a 401k account.)

Whether it’s investing, paying off debt, or building your future empire – Penny’s goal is to provide real-life finance advice for women, so you can feel empowered and confident when making ALL your money moves.

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