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Author: ptheland Big gold star, 5000 posts Feste Award Nominee! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121114  
Subject: Re: Fractional Shares & Splits: Accounting For Date: 8/2/2000 12:56 AM
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I cannot do the "triple the number of shares and take 1/3 of the cost" to these two lots, because I end up with 0.6876 shares too many (which is the part not "given" to me in the split, but instead paid in cash to me).


After thinking about this for a bit, I find that I need to question your assumptions. I'm guessing that this isn't exactly a hypothecital question -- this is a real transaction (with somewhat disguised/simplified figures). AFIK, the only way to have fractional shares in a stock (other than a mutual fund) it to be in a dividend reinvestment plan. The question - are you sure your DRIP wouldn't also do the 3:1 split on the fractional shares? This would, of course, eliminate the problem. I guess what I'm saying is that I see you getting either: A) 180 shares (the 90 * 2) with 1.6876 shares paid in cash (for the two fractional lots) or B) 181.6876 shares - 2 * all of your shares including fractions.

Next - I doubt if Schwab will deal with the fractional shares from a DRIP - it's usually only the company that is willing to take on the problems of fractional shares. Are your problems explaining the situation to them related to their inability to deal with fractional shares?

Sorry for the non-answer answer. I just got more questions the more I thought about it.

--Peter

PS - In my ongoing attempt to sharpen my crystal ball skills, you wouldn't happen to be in the engineering field, would you?
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