Is it worth the trouble to sell rather than borrow against it? Anyone have any idea on the economics of borrowing against such a large amount of equity in such a stable company?
The first mistake made by young people who are suddenly 'rich' on paper because the one stock they own is worth a lot of money, is borrow against it as if it was money. Only to have the stock value vanish and they end up destroying what savings they did have repaying those loans.
There were a number of stories in the Mercury News about people who built dream homes starting pre-bust, only to sell them for pennies on the dollar post-bust because they couldn't afford them any more.
Larry Ellison has been living off credit for the last decade or so; he's put up ~$4B worth of Oracle stock as collateral. http://www.sfgate.com/news/article/Inside-look-at-a-billiona... http://www.forbes.com/sites/calebmelby/2012/09/25/larry-elli...
It did not end well for him (divorce, no $2.3M home, no car, no money, etc.).