Re:Striking auto workers want a 40% pay increase–the same ra...
by WalterBright on Monday September 18, 2023 @07:54PM
(#37563873)
Shares can and do go up and down quite a bit. I bought heavily into one tech company where the shares went down 90% in a couple months. It was pretty devastating for me.
> You can however use those shares as collateral
Only shares that you own, not have an option to buy. And only a portion of the shares, and if your shares become worth less than the loan, you still owe the money, and they'll come after any other assets you have.
> you might have a great deal of shares in a company, which you never exercise
You're confusing owning shares with having an option to buy shares. They're very different. You'll also owe income tax on the difference between the exercise price and the current price of the shares. (A friend of mine didn't know that, and consequently lost his house.)
> You can however use those shares as collateral
Only shares that you own, not have an option to buy. And only a portion of the shares, and if your shares become worth less than the loan, you still owe the money, and they'll come after any other assets you have.
> you might have a great deal of shares in a company, which you never exercise
You're confusing owning shares with having an option to buy shares. They're very different. You'll also owe income tax on the difference between the exercise price and the current price of the shares. (A friend of mine didn't know that, and consequently lost his house.)