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Re: Spin-offs (Request for Enhancement)

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Posted by Mark on November 16, 2000 at 06:56:16:

In Reply to: Spin-offs (Request for Enhancement) posted by Dennis Kowallek on November 15, 2000 at 14:22:53:

: Mark:

: I spent over an hour this morning entering everything I needed in Fund Manager
: for the recent Lucent/Avaya spin-off. (This is at least the 2nd spin-off I gone
: thru this year.)

: The Lucent part was relatively easy, but the Avaya piece was tricky. Since
: multiple (3) purchases and a redemption of LU were involved, I ended up
: having to mirror these 4 transactions on the AV side.

: The LU side looked something like...

: buy 7.2 LU
: buy 7.2 LU
: sell .4 LU
: buy 36 LU

: The AV side ended up looking like...

: buy .6 AV
: buy .6 AV
: sell .1 AV
: buy 3 AV
: sell .1 AV (this corresponds to the cash received in lieue of fract. share)

: Isn't there any way to mechanize this in Fund Manager?

: Typically, the info I receive is as follows (I'll use the LU/AV) example...

: you get 1 share of AV for every 12 LU
: your new LU basis is .95 times your old LU basis
: your new AV basis is .05 times your old LU basis
: you received $2.59 for the .1 share of AV we sold for you

: Isn't this enough for Fund Manager to work with?

: Thanks,

: Dennis

Hi Dennis,
Yes, this could be more automated. Also, there is an easier way
to handle spin-offs than re-entering all your transactions at the
new rate. Use a return of capital distribution in the parent (for 0.05 *
the original LU basis in this case). Then, record a purchase in the
child for the same amount. In this case you would then also record
the sell of 0.1 shares of AV. For more on this see:

Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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