Company Shares

[BigBrand]

I currently work for a large company, the biggest in it's market. And they've recently introduced a new share scheme.

Between £5 and £40 a month contribution, for every share you buy, you'll get two free.

The current share price is circa £3.51 as of yesterday.

I've never bought shares before, and only held the "free" ones the company give as part of my annual bonus and pay increase. We're not getting free shares this year, instead have been introduced to this scheme.

Am I right in thinking, that technically, if we are looking at around £3.51 a share currently, in order to loose money on this, on the basis we get two free (£7 roughly - circa £10 in total shares per month) then our company share price would have to dip below two thirds of £3.51 for you to loose money?

Wondering if this sort of scheme is worth it?

I know you can't predict where a company is going and how strong a share price would be, but for instance the lowest I've ever seen our share price in 9 years is circa £2.10, at a time our loss ratio was up towards 80%!

[dpSparhawk]

This kinda seems very similar to the scheme I asked questions about a few days back (albeit kinda in the wrong section of the forum dumb fk that I am lol ).

http://www.digital-forums.com/showth...company-Shares

I'm in a similar situation. However, Whereas I don't get "free" shares, I agree a set payment per month and where as our shares are at just over £30, I am guaranteed an exercise price of £23 which means effectively, I'm already up circa £7/share. So, in order for it to be pointless for me to carry on or considering purchasing, the share price would have to drop around £7 or more for it to be pointless (I only purchase the shares at the end of the term and can sell immediately should I wish)

I have the option of bailing out of the sharesave scheme at any point during the 36 months if the shares are plummeting or I just simply want out and I get every single penny back that I put in. Also, at the point of maturity, if the share price is lower than the exercise price I got them for (£23), I also simply get all my money back so in effect, unless I'm stupid and purchase the shares after 3 months and then hold onto them to gamble, I can't actually lose any money.

Your companies scheme may actually be different to this so the guys who were brilliant in advising me will be able to help. I'd certainly find out exactly what your protection is, that is, do you buy the shares immediately and basically live on a gamble or do you have right to decide at the end of a term whether to buy and sell, back out or buy and hold on for a gamble.

[Geko]

I was involved in a share save scheme back in 98. I got the shares at a discounted rate and paid in £250 a month, which was the maximum. I sold them when the scheme ended 5 years later at 4 times that price. I made a very nice return which I then stuck in property. It gave me a good start. Although I lost it all when I split with my missus a few years ago.

I'd say it depends on your company. Mine had a proven track record for making a profit, and still does now. The only reason I haven't been doing share saves since, is that the company got bought by a different company, the shares are no longer traded in my company, but in the parent company, and nothing is offered to staff any longer.

[legolamb]

Go for it, as long as you think the company has a future you're on a winner really, I've been involved in various schemes through work and all of them have payed off well.
We don't get the free and matching anymore but I still buy into the sharesave scheme as a long term savings plan and my company pay a reasonable dividend which makes it as good as if not better than money in a savings account given the crap interest rates currenty on offer, plus the added bonus of shares I bought for £8 are currently worth £16 :-)

[BigBrand]

Thanks for the input guys,

I think I will go for it, although they have limited this to a maximum of £150 a month for the free shares, but we're still eligible to pay up to £250 total, £100 extra on single shares, per month.

The company is a solid company that everyone knows, and share price has always been steady. I know from AGMs that the company is planning and has already sold some of its overseas assets and is concentrating on it's core business and progressing that further.

I can also adjust my contribution anytime, so going to be going for this.

Cheers all!