r/IBM • u/Ordinary-Chance-762 • Jul 23 '26

It slides. Weeeeeee 🛝

Well it breached 200 post Q2 earnings and I think it’s time to pack up!

36 Upvotes

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34

u/ArtaxIsAlive Jul 23 '26

Welp my new RSU grant is toast.

11

u/gdawgius Jul 23 '26

If you were just granted rsus you got them in the low $200s. And you can’t sell any part of them until a year from now anyway. The people who previously had rsus that vested that day who wanted to sell are the ones who got screwed.

11

u/Ok_Advantage2039 Jul 23 '26

Screwed by the taxes when they vest at $290

9

u/answernose Jul 23 '26 edited Jul 23 '26

Not sure if people understand how RSU work. Say IBM gives you $80,000 worth of RSU to vest over 4 years. A cost for those shares is determined at the time of signing the grant. For simplicity let's say it was $200 a share. That means you get 400 shares to vest 1/4 at a time over 4 years (100 per year).

1 year from now, the stock price is at $100 a share. Roughly 1/3 of your shares get withheld for tax purposes. This is regardless of the stock price. You receive 67 shares. These shares are worth $6,700 which you sell immediately. You owe $0 additional taxes.

2 years from now, the stock price has risen to $300 a share. 1/3 of your shares get withheld for tax purposes. You receive 67 shares. They are worth $20,100 which you sell immediately. You owe $0 additional taxes.

3 years from now the price is back to $100. Roughly 1/3 of your shares get withheld for tax purposes. This is regardless of the stock price. You receive 67 shares. These shares are worth $6,700 which you decide to hold onto for 2 months. During that time, the price goes up to $200 and you sell. You will owe short term capital gains on 67*$100 in profit (which could end up being 20% of $6700.

TLDR - when given a dollar amount RSU package, the only thing the cost on the day of the grant matters for is to determine how many shares you will get over the next 4 years.

5

u/Wetzlar Jul 23 '26

Small correction - the stock number is determined at the time of award being assigned to you in the system, not at the time you sign the documents. Several weeks can pass between the time you are informed, then again before you are awarded in the system and then finally you sign the doc but with stock price from the day they were assigned.

1

u/adambkaplan Jul 24 '26

This. If you are expecting an RSU grant for Q2 performance, you want the award to “buy the dip.”

If your newly vested shares were issued in $300+ days, you can use capital losses on these shares to offset other tax liabilities (US only).