Should I consider working for a company where their stock is tanking?

[baydude]

I currently work in a well established company and looking to move on with opportunities outside as I've been here too long. I had an interview with a recruiter today for a company that went ipo about a year ago but their stock has declined from $25 ipo to $8! Is this a bad idea to proceed?

 

[PandaBear]

If you get a good paycheck it is not a bad deal, but if you expect the stock to go back to $25 or $100 then I wouldn't.

I've worked for a well established tech company that went from $100 to $8 and back to $30 then $50 then $80 then $64 and got bought out at that price. My initial sign on stock option has been underwater the whole time.

 

[dr150]

Post IPO companies are a risk depending how "one trick pony" the company is.

That said, the whole market has tanked so you can't fully place the blame on the price action hitting 8 bucks for said company.

Post IPO companies are less secure since they're not as mature.

Salaries and benefits (401k, health) are also much less so you should factor that too in your equation.

 

[Michael]

As long as the company is strong a lower price means your initial options are priced lower.

Michael

 

[cubby1223]

I currently work in a well established company and looking to move on with opportunities outside as I've been here too long. I had an interview with a recruiter today for a company that went ipo about a year ago but their stock has declined from $25 ipo to $8! Is this a bad idea to proceed?

Is your salary tied to the stock price?

 

[maddogchen]

what happens if the stock went from $8 to $25 again? You would make a lot of money. Also, maybe the company will be bought by a bigger, more established company?

 

[cubby1223]

what happens if the stock went from $8 to $25 again? You would make a lot of money. Also, maybe the company will be bought by a bigger, more established company?

If you buy stock in the company, that is. But that's not the topic.

 

[Newbian]

If all goes to hell you can always walk away with some goodies when they shut their doors.

 

[kranky]

I wouldn't care too much about the stock price. What I would care about is whether sales/revenue is growing or dropping.

 

[Exterous]

I wouldn't care too much about the stock price. What I would care about is whether sales/revenue is growing or dropping.

:thumbsup: It could be they priced their IPO too high. Or maybe they have strong growth but it wasn't quite as high as Wall St thought it should be. There are reasons aside from bad company performance that could cause stock prices to go down. That said there are also plenty of reasons that would give me pause about working there. Since its a publicly traded company you can get access to their financial filings and see what they look like. Growth of revenue? Good return on capital? Return on equity etc