ESPP with 5% Discount but 3-Year Lockup… Is This a Joke?

So my company has an Employee Stock Purchase Plan where I can buy shares at a 5% discount, but I can’t sell them for three whole years.

Is this even worth considering? That seems like a long time to be stuck with a stock for such a small discount. Would you do it? How do you decide if an ESPP is worth it?

Not worth it unless you’re working at a rock-solid company with a proven track record. If it were a 20% discount, maybe it’d be worth thinking about, but 5% is nothing when you’re locked in for three years.

@Jess
Even at 20% I’d think twice. A basic 60/40 portfolio has averaged around 8% annually over time, and that comes with way less risk than betting on a single stock. Over three years, that’s about 25% total growth (not guaranteed, but still).

For 5%? No way. Not even a question.

If it’s a startup, absolutely not. If it’s IBM or some other giant, maybe.

But honestly, locking you into stock for three years? That’s some sketchy retention tactic, like they’re trying to trap employees.

@Lin
From what I understand, it’s a lockup period, not a vesting thing. Even if you quit, the shares are yours—you just can’t sell them for three years.

Still a terrible deal.

Yeah, no way. 5% isn’t worth locking up your money that long. Hard pass.

Ask yourself this: if you weren’t getting the ESPP, would you still buy and hold this stock for three years?

If the answer is no, then don’t do it.

Unless it’s SpaceX or some other crazy exclusive private company, this isn’t worth it.

Terrible deal. Three years is a long time—anything could happen. I’d need at least a 70% discount before I’d even consider it.

Awful terms. My company gives 15% off with no lockup. They need to up their game.

5%? Not even close to being worth it. If they bumped it to 25%, maybe.

I wouldn’t touch this ESPP. 5% isn’t much of a discount, and a three-year lockup is nuts.

You’re already taking a risk by working there—why tie up even more of your money?

For reference, my ESPP gives a 15% discount with no lockup. I max it out every cycle because it’s basically free money.

3-year lockup for a 5% discount? That’s a joke.

Wait… is this a private company? Because I’ve never heard of an ESPP with a lockup period at a public company. Not sure how they’d even enforce that.

If it’s private, I’d stay away. Three years is a long time, and stock options are supposed to handle that kind of thing, not ESPPs.

How’s the company doing? Are they profitable? Expanding? Stable? What industry are they in? Public or private?

Need way more details to even consider if this is worth it.