Why Costco Employees Are So Excited About This Stock Milestone

The stock market is at record-high levels right now, according to Yahoo! News, and if you zoom in on Costco (via Google), you might imagine the warehouse wholesaler carrying the entire market on its back. Costco stock has more than doubled in value over the past three years, and on Wednesday, November 3, it hit an impressive milestone: $500 a share.

The reason for the rise in Costco's share price over the past year and a half or so has been the warehouse chain's success during the COVID-19 pandemic, according to Nasdaq. While many businesses around the U.S. have struggled mightily during the pandemic — restaurants would be a good example — Costco has actually been doing better than normal during this period. It turns out that Costco has a business model built for a pandemic and the associated downturn in the economy: It sells essential items at low prices.

At $500 a share, Costco's stock price is too steep for a lot of average Americans. But the company offers stock options as part of its benefit package to employees (via Glassdoor). Costco has a low employee turnover rate, too. In early 2021, the average time Costco employees had been working for the company was nine years, per Business Insider. The combination of stock options and plenty of longtime employees has created an unusual phenomenon in today's American economy: millionaire wage workers (via Reddit).

Reddit user "theeidiot" recognized the $500 Costco stock milestone in a Reddit post on November 3. The post provided current and former Costco employees an opportunity to compare notes about their participation in the company's stock option.

Redditor Nardelan, who worked at Costco, diverted $130,000 from his paycheck over 17 years to buy the company's stock. Now, he says, those shares are worth $650,000. "I will always be a Costco fanboy because I know how much is possible for entry level workers," Nardelan wrote on Reddit, adding, "Costco bought my first brand new car, my first house, and took me on many vacations. The opportunities are endless." The original poster, "theeidiot," said that, coincidentally, they had been purchasing Costco stock for 17 years, too. When they started, it was $40 a share. "I know so many Costco millionaires and it still blows my mind," Nardelan replied.

We aren't giving stock advice here, but for what it's worth, Nasdaq says Costco shares are not a good buy right now at their current high price. Revenue trends indicate that the surge in business Costco got during the pandemic is slowing down.