Author Topic: STOCK PRICE TALK: Opened at $24.75  (Read 33759 times)

core

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Re: UPDATED: Opened at $24.75
« Reply #60 on: December 11, 2014, 08:03:32 PM »
Can I sell the shares immediately without invoking a "Good Faith Violation"? And what are the consequences of that, anyway?

There are no real consequences of even multiple GF violations here since this is a temporary account and you will not need buying privileges in it. 

Fred

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Re: UPDATED: Opened at $24.75
« Reply #61 on: December 11, 2014, 10:19:38 PM »
At least if you wait until 1/1, you won't have to pay until 4/15/2016.

You also risk getting a loss if LC shares go below $15 by 1/1.

VirginiaBob

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Re: UPDATED: Opened at $24.75
« Reply #62 on: December 12, 2014, 04:15:21 AM »
At least if you wait until 1/1, you won't have to pay until 4/15/2016.

You also risk getting a loss if LC shares go below $15 by 1/1.

I'd assume by not selling, he meant he is holding but with a stop loss order at $20-$22 per share.  That is what I did - I have a stop loss at $22 a share.  If the price dives, I get $1,750.  If it rises, my trailing stop loss rises and my profits increase.  My guess is that performance will be really good until the 180 lock-up period is over.  Then, inevitably, lots of lower level employees will sell for profits.
« Last Edit: December 12, 2014, 04:17:24 AM by VirginiaBob »

avid investor

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Re: UPDATED: Opened at $24.75
« Reply #63 on: December 12, 2014, 08:33:08 AM »
At least if you wait until 1/1, you won't have to pay until 4/15/2016.

You also risk getting a loss if LC shares go below $15 by 1/1.

I'd assume by not selling, he meant he is holding but with a stop loss order at $20-$22 per share.  That is what I did - I have a stop loss at $22 a share.  If the price dives, I get $1,750.  If it rises, my trailing stop loss rises and my profits increase.  My guess is that performance will be really good until the 180 lock-up period is over.  Then, inevitably, lots of lower level employees will sell for profits.

Exactly Bob.  Guess we fellow Virginians get it.  So many here were whooping and hollering about making $2k by buying 250 shares at $15.  But selling immediately means it is really only worth about $1200 because the Fed and State will be holding their hands out right away.  Not saying I will hold long term, but I do believe that the stock is stable enough to ride out a few weeks.  It might even go up.

rrsafety

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Re: UPDATED: Opened at $24.75
« Reply #64 on: December 12, 2014, 09:33:58 AM »
LC up a bit on the open.

BruiserB

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STOCK PRICE TALK: Opened at $24.75
« Reply #65 on: December 12, 2014, 11:05:56 AM »

At least if you wait until 1/1, you won't have to pay until 4/15/2016.

You also risk getting a loss if LC shares go below $15 by 1/1.

I'd assume by not selling, he meant he is holding but with a stop loss order at $20-$22 per share.  That is what I did - I have a stop loss at $22 a share.  If the price dives, I get $1,750.  If it rises, my trailing stop loss rises and my profits increase.  My guess is that performance will be really good until the 180 lock-up period is over.  Then, inevitably, lots of lower level employees will sell for profits.

Exactly Bob.  Guess we fellow Virginians get it.  So many here were whooping and hollering about making $2k by buying 250 shares at $15.  But selling immediately means it is really only worth about $1200 because the Fed and State will be holding their hands out right away.  Not saying I will hold long term, but I do believe that the stock is stable enough to ride out a few weeks.  It might even go up.

Haven't decided whether to sell yet, but am considering it since my losses through defaults in my Lending Club account are Capital Losses that can be written off against short term Capital Gains.  I'd rather have defaults wipe out short term gains than lower taxed long term gains.  So I may either sell this month or wait till early next year to be used against next year's defaults.


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Unfolder

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #66 on: December 12, 2014, 12:18:19 PM »
LC showing resilience on a down day, I like it. How long will we get an irrational exuberance premium?  :P

VirginiaBob

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #67 on: December 12, 2014, 12:26:31 PM »
I'd rather have my defaults give me a $3,000 tax deduction than have those losses wiped out by offsetting them against the gains sale of LC stock.

Why sell instead of just utilizing a trailing stop loss order?  Do you live paycheck to paycheck and absolutely need the money right now?  Not me, I plan for the future.

The way I see it is that on Dec 10th, I made the decision to risk $3,750 on this company.  A lot of people were saying to pass on this loser IPO since it was overvalued at $15 (versus the original $10-$12 range, which was still overvalued).  I disagreed and stood by this company.
On Dec 11th, after open, I put in a stop loss order at $22.00, locking in the original $3,750 I risked plus an additional $1,750 of profits.  So the only money left that I am risking is additional money gained.  Currently the share price is about $24.50, so I am only risking 250 x (24.50-22) = $625 of found money.  If I was willing to risk $3750 of my own hard earned money on this company, I certainly have no problem risking $650 of found money.

I'd suggest being patient and putting in an appropriate stop loss order unless you need the money right now.

brycemason

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #68 on: December 12, 2014, 12:36:29 PM »
I'm happy for people who are enjoying the ride, but I have to think that LC wouldn't willingly let so much money stay on the table. Why not have $1.5B or $2B in the coffers? The underwriters probably had some of the best people in the business trying to value the company and put a fair price tag on it. That's $15, up given the significant investor interest. With a +60% valuation in one day, so much future growth is baked in that I don't at all blame people who got out at the open. It could stay there for months; it could drop down tomorrow. It's impossible to say. Unrealized gains are opinions.

VirginiaBob

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #69 on: December 12, 2014, 12:39:04 PM »
I'm happy for people who are enjoying the ride, but I have to think that LC wouldn't willingly let so much money stay on the table. Why not have $1.5B or $2B in the coffers? The underwriters probably had some of the best people in the business trying to value the company and put a fair price tag on it. That's $15, up given the significant investor interest. With a +60% valuation in one day, so much future growth is baked in that I don't at all blame people who got out at the open. It could stay there for months; it could drop down tomorrow. It's impossible to say. Unrealized gains are opinions.

Gains supported by stop loss order are not opinions though.  They are pretty much locked in +/- fractions of a percent.  Anyways, another +5% day!  Bump up my stop loss slightly and lock in again.
« Last Edit: December 12, 2014, 12:47:38 PM by VirginiaBob »

BruiserB

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STOCK PRICE TALK: Opened at $24.75
« Reply #70 on: December 12, 2014, 01:15:29 PM »
I'd rather have my defaults give me a $3,000 tax deduction than have those losses wiped out by offsetting them against the gains sale of LC stock.

Why sell instead of just utilizing a trailing stop loss order?  Do you live paycheck to paycheck and absolutely need the money right now?  Not me, I plan for the future.

The way I see it is that on Dec 10th, I made the decision to risk $3,750 on this company.  A lot of people were saying to pass on this loser IPO since it was overvalued at $15 (versus the original $10-$12 range, which was still overvalued).  I disagreed and stood by this company.
On Dec 11th, after open, I put in a stop loss order at $22.00, locking in the original $3,750 I risked plus an additional $1,750 of profits.  So the only money left that I am risking is additional money gained.  Currently the share price is about $24.50, so I am only risking 250 x (24.50-22) = $625 of found money.  If I was willing to risk $3750 of my own hard earned money on this company, I certainly have no problem risking $650 of found money.

I'd suggest being patient and putting in an appropriate stop loss order unless you need the money right now.

Normally I end each year with a fair amount of long term capital gains and almost no short term capital gains.  This is because I invest mostly in mutual funds that distribute long term gains or sell only stocks that I've held more than a year.  This income is taxed at long term rates....I can't remember if it is 15 or 20%.

The defaults I have on Lending Club end up offsetting these capital gains each year as they are considered capital losses.  Therefore it offsets income that would only be taxed at 15 or 20% rather than income that is taxed at my normal marginal rate.  Therefore I still end up paying tax at my full marginal rate on my earned income as well as on the interest I earn from Lending Club notes and I reduce the income I make that would normally be taxed at a lower rate.....so it decreases my long term capital gains.

My only point was now I have this windfall short term capital gain that I could use to offset my defaults.  Lending Club defaults can be written off against Short Term gains first, then Long Term gains, then Ordinary income up to $3000 per year.  If I were to take my Short Term gain now, I could write my losses off against it and preserve more of my Lower-Taxed Long-Term gains.  Or I could sell in early January and do this next year.

If one thinks that there is still considerable upside in Lending Club, then as you say it would be best to hold tight.  I'm just not sure how much of the price now is actually justified and how much is irrational exuberance over a "new" web/financial company.  That's why I'm thinking about selling.

If you have no capital gains each year, then you are right, your losses go against your normal income and reduce your taxable income up to $3000.  I have more than $3000 in yearly defaults and have a fair amount of long term capital gains that would be wiped out by my defaults.  In my case it might make sense to take the money and run from the IPO.  It's not at all a matter of living paycheck to paycheck....it's a matter of being a sound financial decision.  Also there's nothing unique about using my Lending Club IPO gains to do this....I could do the same with any other Short Term held stock....it's just that I don't have any.


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Fred

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Re: UPDATED: Opened at $24.75
« Reply #71 on: December 12, 2014, 01:47:20 PM »
At least if you wait until 1/1, you won't have to pay until 4/15/2016.

You also risk getting a loss if LC shares go below $15 by 1/1.

I'd assume by not selling, he meant he is holding but with a stop loss order at $20-$22 per share.  That is what I did - I have a stop loss at $22 a share.  If the price dives, I get $1,750.  If it rises, my trailing stop loss rises and my profits increase.  My guess is that performance will be really good until the 180 lock-up period is over.  Then, inevitably, lots of lower level employees will sell for profits.

I thought this is more about tax & timing issues.

If your stop loss order gets executed before 12/31, forget about waiting until 4/15/2016.

Fred

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #72 on: December 12, 2014, 01:54:09 PM »
I'd rather have my defaults give me a $3,000 tax deduction than have those losses wiped out by offsetting them against the gains sale of LC stock.

Many investors in this Forum maintain 6- and 7-digit LC portfolio; we have to deal 2014 defaults that are much more than $3K.  Any attempt to lower it is money in the bank.

rocco.g

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #73 on: December 12, 2014, 10:28:19 PM »
Gains supported by stop loss order are not opinions though.  They are pretty much locked in +/- fractions of a percent.  Anyways, another +5% day!  Bump up my stop loss slightly and lock in again.

Stop loss orders are only good while the market is open.  For some reason really bad news always seems to come out when the market is closed, then the stock opens up the next day down double digit %.  Or if bad news is released during the day and one of the new limiters on the market is hit and halts trading, your order might not get processed.  Your stop loss order does not protect you from these really bad scenarios, it only is useful when the stock is following a slow downward path and you want to get out if it doesn't turn around.  Until you sell, your gain is only on paper.  I am not saying I think one of these horrible scenarios is going to happen to Lending Club, but I thought I would chime in with clarification on how a stop loss order works so people do not get the misconception that it locks in their profit.

VirginiaBob

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Re: STOCK PRICE TALK: Opened at $24.75
« Reply #74 on: December 12, 2014, 10:39:36 PM »
Gains supported by stop loss order are not opinions though.  They are pretty much locked in +/- fractions of a percent.  Anyways, another +5% day!  Bump up my stop loss slightly and lock in again.

Stop loss orders are only good while the market is open.  For some reason really bad news always seems to come out when the market is closed, then the stock opens up the next day down double digit %.  Or if bad news is released during the day and one of the new limiters on the market is hit and halts trading, your order might not get processed.  Your stop loss order does not protect you from these really bad scenarios, it only is useful when the stock is following a slow downward path and you want to get out if it doesn't turn around.  Until you sell, your gain is only on paper.  I am not saying I think one of these horrible scenarios is going to happen to Lending Club, but I thought I would chime in with clarification on how a stop loss order works so people do not get the misconception that it locks in their profit.

While true, this is mostly overcome by applying for after hours privileges at the brokerage firm and setting your stop loss orders active when the market is closed.