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I am trying to understand a discrepancy among a few stock split data sources. One such example is HLT's split on 2017-01-04 (see https://ir.hilton.com/spin-off-information). On this date, HLT spun off into HLT, PK, and HGV. Investors received 0.2 PK and 0.1 HGV for each HLT. HLT then had a 1:3 reverse split to bring the trading price back up.

The NASDAQ's splits calendar shows a 1:3 ratio, however Yahoo Finance and splithistory.com both list a 1000:2052 ratio instead. Seems this latter split is accounting for the spinoff somehow. How do they arrive at 1000:2052... is that some officially published number? I am unable to figure out how they got that.

My attempts at reproducing that ratio: HLT closed 2017-01-03 at $27.39, and opened 2017-01-04 at $57.3. That's a 1:2.092004381 ratio, so doesn't quite line up. From this link it seems "when issued" tickers PK-WI and HGV-WI started trading ~21 days prior. My guess is NYSE took the closing prices for those on 2017-01-03 to calculate the split ratio to apply the morning of the 4th. E.g A ratio of 27.39 : 3*(27.39 - close(PK-WI) - close(HGV-WI)). However, I can't find any historical data for those when-issued shares, so can't verify if that gives us 1000:2052. Just seems there would be some central, officially published split ratios that the exchange applied to magically update the price.

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There is no central source for split ratios. NYSE doesn't actually calculate split ratios - that is up to each data vendor to determine based upon the corporate actions reported. Here's how Norgate Data does it under the hood:

Ex-date for corporate action: 2017-01-04
Entitlement date or corporate action: 2017-01-03
HLT Closing price on entitlement date: 27.39
HLT Open price on ex-date: 57.3
HLT Open price on ex-date: 58

Spinoff action leg 1:

  • Demerger of 0.1 Hilton Grand Vacations (HGV, was trading as HGV-WI on the day
  • HGV on entitlement date: 25.58
  • Value of leg 1: 2.558

Spinoff action leg 2:

  • Demerger of 0.2 Park Hotels & Resorts Inc (PK, was trading as PK-WI on the day)
  • PK on entitlement date: 30.5
  • Value of leg 2: 6.10

Total value of spinoffs: 2.558 + 6.10 = 8.658

Spinoff dilution factor: (27.39-8.658)/27.39 = 0.6838992332968237
Reverse split 1:3 = factor: 3

Combined factor: 0.6838992332968237 * 3 = 2.051697699890471

That factor is then applied to all prices prior to the ex-date.

Regarding the "when issued" prices and historical data, this is also up to the data vendor. Norgate Data prepends any "when issued" pricing data to a stock's history. Some vendors don't do this though.

Best regards, Richard Dale

Disclosure: I am a co-owner of Norgate Data.

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  • So you got $25.58 and $30.5 as Jan 3rd's closing price for HGV-WI and PK-WI?
    – Azmisov
    Aug 27, 2021 at 2:36
  • Also, with there being no central source, that means every market participant is on their own in figuring out the correct price adjustment... no regulations or protections of any kind? E.g. Hypothetical scenario where all market makers forget to factor in a split, and are giving out quotes at the wrong price; that could theoretically happen?
    – Azmisov
    Aug 27, 2021 at 2:47
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    @Azmisov Yes those are the close prices of HGV-WI and PK-WI on the entitlement date.
    – Richard at NorgateData
    Aug 27, 2021 at 4:21
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    Regarding incorrect quotes - yes this can and does happen, especially in the more illiquid stocks, and is far more common thank you would think when you get to OTC stocks. For certain types of corporate actions open orders resting in order books are wiped (this is exchange/trading venue dependent though) - for a reverse split, this would be the case. You really want to know that things about any such events prior to the open on the ex-date in case you want to modify your orders.
    – Richard at NorgateData
    Aug 27, 2021 at 4:27

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