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12 votes

How is there a market for shares that get destroyed on sale?

They aren't destroyed, they are -- in your own words -- "converted". Thus, at the time of sale (which means "now", since you can sell them at any time), they'll have the value of A shares.
RonJohn's user avatar
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9 votes

I received stocks from a spin-off of a firm from which I possess some stocks. Which date is used to determine if capital gains are short or long-term?

From IRS Publication 550, page 53: Stock dividends The holding period for stock you received as a taxable stock dividend begins on the date of distribution. The holding period for new stock you ...
Bob Baerker's user avatar
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8 votes
Accepted

How is there a market for shares that get destroyed on sale?

Is the market for these shares simply the market for the A shares, so you would sell your B shares at the market price of A? Yes that is correct. The clause may be to get an advantage for holding ...
Dheer's user avatar
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7 votes

How is there a market for shares that get destroyed on sale?

In theory there could be situations where the B shares would fetch a bigger price even if they get converted to A shares on sale, because someone might not like your voting power and could be willing ...
Anonymous's user avatar
6 votes

I received stocks from a spin-off of a firm from which I possess some stocks. Which date is used to determine if capital gains are short or long-term?

Specifically from the INFORMATION STATEMENT TO PFIZER STOCKHOLDERS the holding period (for tax purposes) of any shares of Newco [Upjohn Inc.] common stock received (including any fractional shares ...
Jack Fleeting's user avatar
3 votes

When Tencent spun off China Literature in Nov-17, what happened to existing shareholders?

My question is what happened to existing Tencent shareholders at that time? Were they awarded 'free' China Literature shares? They were not awarded free shares. The spin off was different. Tencent ...
Dheer's user avatar
  • 57.1k
2 votes

Salary raise: before or after the spin-off / investment?

There is no right or wrong answer here. If you were anyway planning to ask for a raise, and had informally indicated this in the past; bring it up softly. See the reaction. Keep the door open for ...
Dheer's user avatar
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2 votes
Accepted

How to account for a stock spinoff in an investment account

I am not familiar with MoneyDance so I can't help you with that. But perhaps if you understand the spin off, you can adjust the cost basis of each. A spin-off is a zero sum event in which the total ...
Bob Baerker's user avatar
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1 vote

How to deal with spinoffs when calculating money-weighted rate of return (MWRR) of a stock investment

IRR typically measures cash flows, so I would not do anything with the spinoff except adjust the ending value (last "cash flow") unless you actually sell the shares. So if you get 500 shares ...
D Stanley's user avatar
  • 137k
1 vote

I received stocks from a spin-off of a firm from which I possess some stocks. Which date is used to determine if capital gains are short or long-term?

Pfizer will spin-off its Upjohn subsidiary, calling it Newco. Next, Newco and Mylan will merge. Newco will be renamed “Viatris” (ticker symbol “VTRS”) and will operate both Mylan and Upjohn. This type ...
Ellie Kesselman's user avatar
1 vote

What is the meaning of public stock price data from before the official first day of trading?

For the case of spinoffs it reflects the market as activities as the specific steps that have to be followed take place. For example the spinoff of Leidos from SAIC in 2013. (I picked this one ...
mhoran_psprep's user avatar
1 vote

How is there a market for shares that get destroyed on sale?

While you will sell your B shares at the market price of the A shares, extinguishing the additional voting rights of the B shares by selling them could increase the market value of A shares, so you ...
Mike Scott's user avatar
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1 vote

Salary raise: before or after the spin-off / investment?

Do both. If your participation is crucial for the success of either bringing in the outside investor, or successfully spinning off the company, then you go for both as part of your total ...
Xalorous's user avatar
  • 2,865
1 vote

Is there a simple valuation method for a spin-off

Every industry is going to have different metrics that are used for valuations in general. Further, much of a spin-off's valuation is derived from its ability to be a profitable free-standing entity. ...
Daniel Anderson's user avatar

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