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.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He didn't own shares in any of the companies mentioned in this article at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+, Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.
The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.