Given the tax bill they can create, there's rarely a point to exercising employee stock options before they've grown into a multibagger, Fool contributor Tim Beyers says in the following video.
Don't tell that to Broadcom's (NASDAQ: BRCM) Robert Rango, general manager of the company's mobile and wireless group. He filed a Form 4 disclosure on Jan. 2, according to which he sold 19,386 shares at roughly $29.26 a share. Of those, 9,386 were granted via options immediately exercisable at $23.17 per share.
A good but hardly great gain, Tim says. So why rush the sale? Rango didn't have a choice -- he's operating under the purview of a 10b5-1 trading plan that dictates a specific volume and schedule for selling his Broadcom holdings. Too bad, especially when you consider that at the Consumer Electronics Show, Broadcom debuted new systems on a chip that could reward long-term shareholders.
Now it's your turn to weigh in. Where do you see Broadcom stock a year from now? Three years from now? Please watch the video to get Tim's full take and then leave a comment to let us know what you think.