What if you short the stock, the price rises, but you don't stay employed long enough to receive the anticipated shares? You could incur huge losses. If your goal is to insure your future stock awards against a falling market, you might instead purchase put options that would give you a guaranteed selling price for your future stock awards. However, your new employer may have policies that prohibit you from trading in derivatives tied to the company stock. You may also be subject to a restrictions preventing you from buying or selling the company stock at certain times.
Can I short a company stock when I intend to accept a job offer? [closed]
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2 years ago
Let's say I have a job offer from a public company where a significant part of my compensation is in stock. I like the company and the position but I'm concerned that their stock is overvalued. Now, I'm not a financial analyst, it just feels like there's a fairly good chance it's too highly priced to me.
Can I short their stock before joining, as a hedge against my compensation declining? I do not have any inside information. It would be illegal once I join the company to short it, or at least against their terms of employment, but what about before accepting the offer?
And further, is this a good idea? It seems kind of lame to pass on a job I like just because the stock is overpriced, but perhaps that is the smarter thing to do.