> How the HomeAway Merger Could Affect Austin Employees' Finances - Per Stirling

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November

How the HomeAway Merger Could Affect Austin Employees’ Finances

This post comes from Per Stirling Financial Advisor, Angela Epley, CFP®.

Austin, TX is still buzzing with last week’s exciting news of Expedia’s $3.9B acquisition of HomeAway (NASDAQ: AWAY), an AirBnB rival based here in the heart of Silicon Hills.

The markets seemed just as enthusiastic about the announcement, as was reflected in HomeAway’s stock price leaping from the $32.04 closing price on November 4th to the opening price of $38.06 the day the announcement was made, on November 5th.

Mergers and acquisitions like these don’t only affect stock prices, though. There can often be many changes rippling through both organizations that can last for weeks, or even months. For example, some changes might be cultural in nature, such as the transition from being an entrepreneurial startup company to a well-established, highly-structured corporation. Other changes might be logistical, affecting where employees live or how they commute going forward.

And for many HomeAway employees, there may now be some uncertainty about the future. Should they stay with HomeAway, or move on to the next chapter in their career? How might this Expedia acquisition impact their personal finances?

Here’s a quick list of what Austinites at HomeAway should keep in mind:

  • Review your vesting schedule. Stock options are often offered as a bonus or part of a hiring package, but many companies implement a vesting schedule to incentivize employees to stick around for the longer haul. That means the actual amount of stock you have right now depends on how long you’ve been with the HomeAway. Make sure to review your vesting schedule and actual stock options to get a clear picture of what’s yours today.
  • Set up a rollover IRA – before you leave. Too often, employees who leave one company for another forget to take their 401(k) funds with them. But rolling over your 401(k) from your company’s hands to your own is critical, especially if your company is the type to send you a check for your 401(k) amount. Remember: if you don’t deposit those 401(k) funds into a rollover IRA account in a timely manner, the IRS may demand heavy penalties and taxes – especially if you deposit those funds into a regular checking account. Make sure to get the latest statement for your 401(k) so when you open your own rollover IRA, the institutions can transfer them in a more direct fashion.
  • Talk with your advisor about your company-specific exposure in your overall portfolio. A big boost in the price of your company’s stock can seem like a boon, but it can dramatically alter the overall allocation (or “mix) of your investment portfolio. If your portfolio is overweight in a single company, your portfolio may be riskier than is right for you. So get your trusted Financial Advisor’s thoughts on the impact of your overall portfolio, as well as any tax issues that may arise.

So amidst the well-deserved celebrations and ponderings of the future, and after you’ve exhausted your HR department with questions, discuss these points with your Financial Advisor to make sure you’re prepared for anything that comes your way.