I've got an employee stock purchase plan program. The details are a little tricksy, but I basically get to buy about 2500 shares of company stock at something like $2.33/share... and the stock has been trading around $12 recently (sometimes higher, sometimes lower). I get to do it again in September, and then once more a year from now, before the price resets to something a little less absurdly lucrative.
I haven't consulted with a tax adviser yet (that's soon, though) but I believe if I hold onto the stock for a year, the gain will count as long-term capital gains instead of short-term. That's a really nice way to save on taxes!! I'd prefer to do it, and I don't need the money any time soon. However, it leaves me holding a lot of company stock in the meantime. In fact, $30,000 is approximately the size of the rest of my savings put together. (I'm 25ish, for reference). One small-cap technology stock taking up 50% of my portfolio doesn't strike me as being very diversified, especially if I work there too!
I'm reasonably confident that my company will continue to do all right, and that even if it doesn't, I'm probably going to be one of the people they'd prefer to keep, but it's entirely possible that we'll miss our earnings estimates one quarter, or get sued randomly by a major competitor, and the stock would fall quite a bit. (On the other hand, the analysts seem pretty optimistic, and have target prices around $15 or so.)
I need to decide what to do with all this stock - how much of it to hold, and how much of it to sell, and when. How can I understand the risk involved in holding it for at least a year? What strategies can limit it?