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Trade Stock for Condo?

Started by Apt_Boy
almost 14 years ago
Posts: 675
Member since: Apr 2008
Discussion about
Let's say I have $4mm in restricted stock that vests 25% per year for the next 4 years. Would a condo seller accept that and $300k cash for a condo worth approx. $3.3mm? So, for their troubles, they are getting stock worth $1mm more than the condo is worth today, with the risk/benefit of the stock over the next 4 years (assume major financial firm stock) Would you take this deal?
Response by truthskr10
almost 14 years ago
Posts: 4088
Member since: Jul 2009

Forgeting the risk of stock over 4 years for a moment, I think most condo sellers would be too paranoid about being grifted.

Wondering what is/are the tax scenario/implications for such a deal...

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Response by nicercatch
almost 14 years ago
Posts: 242
Member since: Sep 2008

can you even barter without trigerring a gift/capital gain tax?

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Response by rangersfan
almost 14 years ago
Posts: 877
Member since: Oct 2009

no can do. restricted stock has vesting conditions that would not be transferable.

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Response by truthskr10
almost 14 years ago
Posts: 4088
Member since: Jul 2009

So what is it....Tesla Motors? ..... AIG?

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Response by Apt_Boy
almost 14 years ago
Posts: 675
Member since: Apr 2008

would opinion change if it were GS vs. citi? and let's assume the structure has been vetted by the issuer and has their blessing ie waiving various conditions that would make this impratical ie must be employed for the full 4 years

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Response by truthskr10
almost 14 years ago
Posts: 4088
Member since: Jul 2009

Wouldnt touch Citi with a ten foot pole.

In fact Citi hitting $5 inspired me to dump all my stock everywhere else. Other than my 401K which I don't manage, I am now stockless.

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Response by rangersfan
almost 14 years ago
Posts: 877
Member since: Oct 2009

assuming conditions would be waived, and thats a very big leap of faith - terrible deal unless you price in a hedge which will be more expensive then the "premium" you would receive for the shares. regardless of the issuer. if the issuer is even somewhat unstable, then its even worse.....

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Response by Apt_Boy
almost 14 years ago
Posts: 675
Member since: Apr 2008

but citi would need to go to 3.75 just to match the current selling price

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Response by PMG
almost 14 years ago
Posts: 1322
Member since: Jan 2008

Pre-2008 people got loans against their restricted stock, but I don't know how that is working nowadays. I don't think any condo seller wants to take a restricted stock position you seem eager to sell at a discount. If it were a diversified stock portfolio, that would be a lot more attractive.

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Response by nicercatch
almost 14 years ago
Posts: 242
Member since: Sep 2008

http://www.huffingtonpost.com/2011/01/13/citigroup-was-on-the-verg_n_808721.html

And still is insolvent. special investment "conduit" (i love the term: finance people haven't figured out it's a small bowel derivation for treatment of ...bladder cancer), off balance sheet vehicles are loaded with junk. Only repudiation of FASB rules (2009), allowing for mark to model,permit City to even trade.

Woa.get a new job.City is a ZOMBIE

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Response by huntersburg
almost 14 years ago
Posts: 11329
Member since: Nov 2010

Aptboy, have you tried JG Wentworth?

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Response by 300_mercer
almost 14 years ago
Posts: 10149
Member since: Feb 2007

Assuming your company unconditionally guarantees the transfer of stock title (only in your dreams), I still would not take it as I can not hedge it by shorting the stock due to margin calls.

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Response by Apt_Boy
almost 14 years ago
Posts: 675
Member since: Apr 2008

Hey...I hit the big time...thread posted on Curbed and Brickunderground...do I least get a t-shirt for my troubles??

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Response by truthskr10
almost 14 years ago
Posts: 4088
Member since: Jul 2009

Would you trade that t-shirt for a coupon for 4 pair of gold toe sweat socks reedemable once a year for the next 4 years?

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