Question about protecting yourself from company not beating earning eastimate
The best thing to do to avoid this is not to sell as you've described. What purpose does it solve? If you're speculating, set a price at which you want to cash out and put a limit order. If you're a long term investor, then unless something fundamental has changed - why would you sell?
The company match is not earnings. My company deposits 5% of my income into my 401(k) and it appears nowhere except on the paperwork for the 401(k).  To be clear, it doesn't appear on any paystub or W2. I would look on http://seekingalpha.com/currents/earnings. You can also get copies of the conference calls for each company you are looking at. What you referred to is the conference call. The people who usually ask questions are professional analysts. I would recommend getting the transcript as it is easier to highlight and keep records of. I hope that helps "This information is clearly ""material"" (large impact) and ""non-public"" according to the statement of the problem.  Also, decisions like United States v. Carpenter make it clear that you do not need to be a member of the company to do illegal insider trading on its stock. Importantly though, stackexchange is not a place for legal advice and this answer should not be construed as such.  Legal/compliance at Company A would be a good place to start asking questions." Because growth and earnings are going down exponentially for this company? It will eventually go up (like 3 years+), but if you want to feel more pain first, go ahead. Look at the macroeconomic picture before you praise all mighty of an individual company Whether it's wise or not depends on what you think and what you should consider are the risks both ways. What are the risks? For Let's say that the company produces great value and its current price and initial price are well below what it's worth.  By investing some of your money in the company, you can take advantage of this value and capitalize off of it if the market recognizes this value too, or when the market does (if it's a successful company it will be a matter of when). Other reasons to be for it are that the tech industry is considered a solid industry and a lot of money is flowing into it.  Therefore, if this assumption is correct, you may assume that your job is safe even if your investment doesn't pay off (meaning, you don't lose income, but your investment may not be a great move). Against Let's say that you dump a lot of money into your company and invest in the stock.  You're being paid by the company, you're taking some of that money and investing it in the company, meaning that, depending on how much you make outside the company, you are increasing your risk of loss if something negative happens to the company (ie: it fails). Other reasons to be against it are just the opposite as above: due to the NSA, some analysts (like Mish, ZeroHedge, and others) think that the world will cut back on doing IT business with the United States, thus the tech industry will take a major hit over the next decade.  In addition to that, Jesse Colombo (@TheBubbleBubble) on Twitter is predicting that there's another tech bubble and it will make a mess when it pops (to be fair to Colombo, he was one of analysts who predicted the housing bubble and his predictions on trading are often right). Finally, there is a risk of lost money and there is also a risk of lost opportunity.  Looking at your past investments, which generally hurt more?  That might give you a clue what to do. "&gt; You do realize that investors are protected from being sued right?  Not usually, no. If the investor is a partner in the company then they're just as responsible for the debts of their business as any other partner. If they're just a capital investor with no interest in the company business then sure - you can't sue them. But then my contract wouldn't be with them, would it?  &gt; So if the company you work for tanks, you can sue them, but they don't have any money so what do you expect to get?  The registered owners of the company can also be held liable for it's debts if it's a corporation. Or you can always just have them sign as guarantor for your back pay.  And don't say ""Nobody will ever do that!!"", because if your service is valuable enough then **YES THEY WILL**. I've pushed for a personal liability guarantee from a company owner before and got it." This is basically saying that it's not possible to make more than some not-so-large amount without taking for yourself part of what several other people produce, yes?  How does that fit with the very high profits per a employee numbers that some companies have?: http://www.bloomberg.com/visual-data/best-and-worst/most-profitable-employees-companies As littleadv says it depends on the local laws.   Normally one shouldn't be too worried. Typically the stocks given to the employees are a very small portion of the overall stocks ... the owners would not try to jeopardize the deal just so that they make an incrementally small amount of money ... they would rather play safe than get into such a practice. There's virtually no way for a person to completely avoid taxation at some point in their lives. Between payroll, sales, excise, and the like, you've been taxed at some point. And whether or not the individual paid is irrelevant to the ownership claim being invalid. "I'm sorry, unless the employee has a contract he need not be rewarded during successful periods. However, the shareholder does have such a contract: the articles of incorporation.   Your quasi-communist ideology might characterize this situation as also unfair, but the fact remains that an investor is more valuable to a company than an employee is. Furthermore, an investor takes on risk, something an employee does not do. When I purchase CAT stock, I may very well lose everything. I am the last in the long line of creditors. However, the employee does not stand to lose anything, and is much higher in the line of creditors.   The days of Sinclair's ""The Jungle"" are over in this country. CAT has no obligation to pay above-market wages to its employees." I don't want to argue any, either, I'll just reiterate what I was originally trying to get at:   Your boss/owner/manager is dependant on you creating enough value to pay their paycheck as well.  Managers do not directly create value for the company.  They might bring in deals, they might 'know' someone, etc.  but in the end, workers make the product.  If a worker leaves, they'll just have to get another one, or that value ceases.  Taken to the extreme, they'd be a company of bosses &amp; managers, and no work at all being done.  (but plenty of TPS reports done with the correct cover sheets.) Let's say two companies make 5% profit every year. Company A pays 5% dividend every year, but company B pays no dividend but grows its business by 5%. (And both spend the money needed to keep the business up-to-date, that's before profits are calculated).  You are right that with company B, the company will grow. So if you had $1000 shares in each company, after 20 years company A has given you $1000 in dividends and is worth $1000, while company B has given you no dividends, but is worth a lot more than $2000, $2653 if my calculation is right. Which looks a lot better than company A.  However, company A has paid $50 every year, and if you put that money into a savings account giving 5% interest, you would make exactly the same money either way. So the key factor here, IMHO, is the amount we are talking about.  $2K is just not a lot of money.  If you lose every penny, you can recover.  On the other hand it is unlikely to make you wealthy.  So if I was you I would buy in, more for the fun of it all. Now if it was a large amount of money that we were talking about it would be about a percentage of my net worth.  For example, lets say the minimum was 20K, and you really believed in the company.  If I had a net worth of less than 200K, I would not do it.  If I had a larger net worth, I would consider it unless I was near retirement. So if I was 30, hand a net worth of 300K, I would probably invest as even if I did lose it all, I could recover.    Having said all that it does not sound like you completely agree that the company will be profitable.  So in that case, don't buy. Also, I have the opportunity to buy my own company's stock at a discount.  However, I do not for two reasons.  The first is I don't like investing in the company I work for.  Secondly, they require you to hold the stock for a year. No, just as the profits from the bank do not go to their personal accounts and instead go to the banks coffers, where they are paid out as a dividend.   If your company makes a mistake and loses money, do they draw it from your account? I think it is clear that this has a lot to do with keeping salaries down.    The company has a maximal possible salary limit (i.e. the most they would be willing and able to pay) for what you do.  You have a minimal possible salary.  Both of you know that the current salary is in between the two figures.  For negotiations it would be very useful for you to know the maximal possible salary (i.e. the utmost the company would be willing to pay you to stay and continue); the company on the other hand is obliged to keep costs low and hence would like to know your new minimum acceptable salary so they won't make an offer too high.    But if you knew all salaries of people around you -- you could make a better guess about your own maximal possible salary.  You probably would over-estimate it because we all tend to over-estimate our own relevance and competence, but it would be a better informed guess at least.  The company would hence give up an informational advantage which could lead them to have higher costs.  So they will ask you how much you were offered at the competitor (i.e. they will be close to your new minimum acceptable salary) while trying to prevent you from learning anything about the maximal possible salary..