I’ve participated in ESPP for several years, and the lack of a consistent strategy is becoming hard to ignore.
Leadership keeps reacting on short-term measures instead of planning; repeated layoffs every few months erode trust internally and externally.
It’s time for a proactive plan that lasts longer than a calendar quarter. Credibility matters.
Or maybe just use it as a "savings account" that is guaranteed to earn way more interest than any investment vehicle in 6 months. Sell as soon as you can and put the money back in your bank account.
Sometimes it's not just about a few percentages. I don't want all my eggs in the same basket.
Don't have both your income and stocks tied to the same failing company that could lay you off.
Plus I don't want to give Nike interest free money for 6 months. This one is personal.
Tax on the discount and tax on gains. It's not rocket science. Nowhere did they say same money was taxed.
@cd wtf kinda math is that. You must be our CFO or work in finance. 😂😂😂
Explain the part where you get taxed twice again. I swear you guys just make sh-t up or legit can’t count.
“ 15% discount, taxes take out, lets be charitable, 5% of that so you are left with 10%. for past several years, stock has dropped another 5% or more before you can sell, at 5%. You sell and get hit with another tax on gains so you are at 4%.”
Look, let’s say that after all the noise, taxes, mandatory hold period or whatever you only come out around 8%. Which is on the really low end mind you, but I’ll grant you that for this hypothetical.
Well if you know, another investment that is a guaranteed 8% return over six months. You have an obligation to take it as a matter of fact, I asked that you share it here too. Now remember, there is a IRS cap so really the max you’re gonna be able to make is limited but my point still stands if you have a much better or guaranteed investment return the. Take it:
Without fail, the people who think this is a bad idea are the people who want to hold on to the shares or the people who are not liquid enough or savvy enough to be able to rid of them immediately … it’s really not hard. What happens is people will have a good run and change strategies and then they end up getting burned and start blaming ESPP: for me, the 15% is my floor .. anything above that is extra and regardless of what the open or ending price is I am selling immediately and I’ve been doing that and it has never failed me.
Rubes missing out on the fact you can make money on it and it still being a less than optimal strategy to use them. Why make $1 when you can make $5
If you don’t want to take espp, go right ahead. Any financial advisor will tell you Nikes plan is great. If outside of the US, this advice isnt for you.
You guys must be the same folks who wanted “bigger psp payouts” vs money into the 401k for profit sharing.
Seriously.. if you can’t figure out how to make ESPP work for you then just go ahead and put your money under the mattress. I’ve never NOT made money of ESPP at Nike or any other company.
@c7 Not that simple. 15% discount, taxes take out, lets be charitable, 5% of that so you are left with 10%. for past several years, stock has dropped another 5% or more before you can sell, at 5%. You sell and get hit with another tax on gains so you are at 4%. Still gains right? Except that money you were paying towards ESPP sat in a 0 interest account for 6+ months instead of being invested all along.
Not saying it's a bad or a good idea, that depends on the person, but it's not a "clear win"
In NL, you pay 56% income tax on the discount. The remainder of the discount (7%) is always swept away by following price drops and FX costs.
Mmm even with 5-7% drop, you still lock in 8% discount on your purchase. You’re giving up free money. It’s basically like saying “I sense the global market is going to collapse, so I’m going to stop contributing to my 401k and opt out on the 5% Nike matches.”
Makes no sense. Now if Nike’s espp discount was 5%, sure, opt out. But man, even missing out on 15% is like telling your friends you’re maxing out your credit cards and putting down minimum payments because the entire financial backing will fail.
Nike isn’t the green back, but Nike is in the S&P500 so that counts towards something.
I don’t participate in ESPP for a few years now. For the long-term, there is too much risk and fluctuation. For the short-term, the purchase price is always higher than the selling price as there is always a price drop in between (next to the FX costs etc.).