Thread regarding Cisco Systems Inc. layoffs

Cash them out the day they vest.

Wish I could go back in time and do this; all of my vested RSUs are underwater. 😞

I've been doing some research on this myself; here is some useful information:

Generally, if you hold the asset for more than one year before you dispose of it, your capital gain or loss is long-term. If you hold it one year or less, your capital gain or loss is short-term.

To determine how long you held the asset, you generally count from the day after the day you acquired the asset up to and including the day you disposed of the asset.

Source: https://www.irs.gov/taxtopics/tc409

Note that "the day you acquired the asset" is your vesting date (not the award date).

Short-term capital gains tax is a tax applied to profits from selling an asset you’ve held for less than a year. Short-term capital gains taxes are paid at the same rate as you’d pay on your ordinary income, such as wages from a job.

Long-term capital gains tax is a tax applied to assets held for more than a year. The long-term capital gains tax rates are 0 percent, 15 percent and 20 percent, depending on your income. These rates are typically much lower than the ordinary income tax rate.

Source: https://www.bankrate.com/investing/long-term-capital-gains-tax/#short-term-vs-long-term

Treat RSUs as deferred income. Cash them out the day they vest. Doing otherwise exposes you to capital gains tax.

@nsp+1u077qfE RSU value is taxed as ordinary income upon vesting, if you immediately sell you have little to no gain or loss.

Stock grants are subject to capital gains taxes which are categorized as long-term vs. short-term. Long term are grants that you've head for at least one year. Short term < 1 year.

Important to keep the tax implications in mind

Cisco RSUs are simply a bonus paid in the form of CSCO stock. When Cisco pays you a cash bonus, do you take the cash and buy CSCO stock? If the answer is no, then why would you hold the RSUs?

Once I understood this, I always sold RSUs soon after they vested.

I just reviewed this topic with my financial advisor and their advice was to hold unless we needed the cash immediately for something. Cisco generally vacillates between a "buy"
or "hold" stock with most firms (according to my advisor) based on its longevity in the market. I tend to agree with my advisor and with those here saying we should hold. The market is what it is, it just takes one sparkly earnings call to get analysts excited and stock prices to start to climb again. I plan to play the long game with mine.

Without being financialy educated (by that I mean educated investor) my stance on this matter is this: we get the stocks at a discounted price. They also pay dividends. Right now the company is hoovering aroud the bottom of market of big boys (direct competitors or the big 5 etc etc) They are trying to turn it around. Not worki g. The id--ts who are driving now will be removed. The CEO is nearing a 10y term and a review of his achievements is overdue. He took over in 2015. The shares were around 27usd. Adjusted to inflation that is around 35usd today. The stock is 45usd as we speak. Without considering the market share which is shrinking due to outperforming competitors and divergent technologies that are cutting into Cisco's markets (ex: Cloud), it all comes down to a 1% growth. They will have to sack him and his team. That will spike the stock. That is when I plan to selll, unless the stock spikes line 15-20% for other reasons.
The main problem as I see it is that there is no major area where groundbreaking innovations could spike the stock. We are a network company and our golden years are behind us. If you look back each of the main hightech companies rode a wave or two that made them as big as they ate today: Google seaching an indexing info, Microsoft -the PC revolution, Meta -social networks, Cisco -campus network and routing and switching, Juniper security and Internet, Arista -Datacenter.Some of the above reinvented themselves and managed to turn around and avoid the plateu phase. Microsoft in particular shines here with AI, Software as Service (office 360,Azure,VSCode,Github etc etc). I picked MS as example just to show what it takes to make Cisco turn around. Visionary thinking is needed, someone like MS's CEO is needed, someone who started at the bottom, who grew up with the technology and who was a technical person for a long time. Chuck had a brief 5 years of technical work. After that sales and windbagging for the rest of his life without notable achievements in the technology field. It is mindblowing to see how fluffed his wikipedia page is. His achievements are anything but technology related and no wonder why the company is not advancing. His achievements would be notable if Cisco would be some NGO millitating for improving the social aspects of the corporate life.
` As CEO, Robbins became noted for accelerating the pace of Cisco's modern growth,[2][8] while disrupting outdated working modes,[9] promoting employee trust based in transparency of policy and process,[10] and humanitarian policies and workplace diversity.[11][12][13]

In 2018, as the GDPR came into effect, Robbins called for more regulation and for the tech industry to help educate regulators. In February 2019, Robbins promoted the need for comprehensive global privacy legislation, asserting privacy as “a fundamental human right."[14]

Robbins advocated against a 15% increase on tariffs for Chinese goods.[15][16] Robbins has advocated for corporate social responsibility. In March 2018, Cisco pledged to donate $50M to Destination: Home, an organization devoted to ending homelessness in Santa Clara County, where Cisco's headquarters is located. Robbins serves as honorary counsel....`
So yes I would hold till Chuck is removed. Money parked in this stock for me, something like government bonds but which pays dividends

Given the economic outlook for the next 3 to 5 yrs, I would hold them until economic conditions improve. It’s cyclical. Cisco isn’t going to zero despite the naysayers on this site.

Cisco isn't a growth stock. Just sell, otherwise you'll be doubly exposed through your investment portfolio AND your job. You wouldn't buy Cisco if I gave you $45, would you?

Selling Cisco rsus and espp as soon as they vest is a mo brainer

I’m been selling them immediately because I can get better gains from much safer investments. Heck boring index funds perform better (VOO).

I’ve been stacking AAPL for the past 5 years or so too, and it’s sad comparing them. 😂

CISCO stock ==> Flat - it is going to be few hundred dollars difference for you. It is better to cash out (watch out for tax implication though) and invest somewhere else for better gain

Holding the stock or selling is mostly where you think it's going aka gambling. Most people think with Cisco's current leadership that Cisco is in trouble. But you never know and Wall Street generally likes layoffs, so it might get a bump. That's probably about as much help as buy low, sell high, I know but that's the stock game.

Now, there are a couple other things to consider. Holding less than a year means they are not qualified and you'll pay ordinary income tax on them vs capital gains. Selling for a loss aka tax harvesting, being worth it more depends on your specific tax situation.

The only d-mb thing in my opinion is to not take advantage of the 15% ESPP discount. Where else do you get 15% return every 6 months. I know lots of people that do that and sell the stock ASAP, locking in the return ... but also paying ordinary income tax on it.